Why Australia Needs More Startups (And Why You Should Care)

Australia is a country of incredible opportunities—a great lifestyle, strong economy, and plenty of smart, hard-working people who occasionally become Budgie Smugglers. But here’s the thing: if we want long-term economic prosperity, we need more startups.

Not just more big corporations, not just more real estate, but more homegrown, high-growth businesses that can take on the world.

Here’s why Australia desperately needs more startups—and how they benefit everyone, not just tech entrepreneurs.

1. Economic Growth and Diversification

Australia’s economic backbone has been mining, agriculture, and real estate for decades. These industries have served us well, but the future demands more diversity in what drives our economy.

Startups bring new ideas, industries, and job opportunities. When we invest in innovation, we don’t just create wealth for a handful of people—we create new sectors that can fuel economic growth for generations.

Beyond the Housing Market and Wealth Creation

A big chunk of Australia’s wealth is tied up in property. But relying too much on real estate means our economy is vulnerable to housing bubbles, rising interest rates, and stagnant wages.

Startups offer a way to grow wealth beyond just owning property. A strong startup ecosystem means more Australians can build and invest in companies that solve real problems, not just buy and sell houses.

2. Job Creation: More Opportunities for Everyone

Startups hire fast. They may start small, but they create thousands of jobs as they scale—from engineers and marketers to customer support and sales teams.

Unlike large corporations, which often cut jobs to improve efficiency, startups grow by hiring. Every Canva, Atlassian, or Afterpay we create in Australia means more people find meaningful, high-paying jobs.

And it’s not just about tech companies. Startups need people from all walks of life—teachers who become course designers. These retail workers move into customer success or become tradespeople who help build the next great clean energy company.

3. Innovation: The Key to Staying Competitive

The world is moving fast. AI, automation, and renewable energy are transforming entire industries. If Australia doesn’t lead in innovation, we risk being left behind.

Startups are where the magic happens. They take risks, experiment, and build the next generation of world-changing products. Without startups, we wouldn’t have Canva revolutionizing design or Cochlear giving people the ability to hear.

A thriving startup scene means more Australian companies competing on the global stage instead of relying on imports from Silicon Valley.

Recent Stats: Australia's Innovation Standing

However, recent data indicates that Australia is slipping in global innovation rankings. According to the Global Innovation Index 2023, Australia ranks 24th among 132 economies, a decline from previous years. This drop highlights a pressing need to bolster our innovation capabilities to remain competitive internationally.

Moreover, Australia's gross research and development (R&D) expenditure has been relatively stagnant. In 2019, the country spent approximately 1.79% of its GDP on R&D, which is lower than other developed nations. This underinvestment hampers our ability to innovate and keep pace with global advancements.

Fostering a vibrant startup ecosystem is crucial to reversing this trend. Startups drive innovation by challenging the status quo and introducing disruptive technologies. By supporting them, we can enhance Australia's position in global innovation rankings and ensure long-term economic resilience.

4. Attracting Capital and Exporting Aussie Innovation

Startups don’t just bring new ideas—they bring in investment dollars worldwide. Venture capitalists, angel investors, and corporate partners are eager to back bold ideas—if we give them something worth investing in.

The more successful startups we have, the more money flows into the country. And when they scale internationally, they bring foreign revenue back home, strengthening our economy.

Australia has proven we can do it. Atlassian, Airwallex, and Culture Amp started here, but we need more companies like them to build an economy that isn’t just mining and banking.

5. Breaking Free from Commodity Dependence

Australia’s economy has been built on selling stuff we dig from the ground—coal, iron ore, gas. But commodities are volatile. Prices rise and fall, and global demand isn’t guaranteed forever.

From 2018 to 2019, Australia was considered commodity export dependent, with more than 60% of its merchandise exports comprising commodities. This reliance is comparable to regions like South America, where all 12 countries had a commodity dependence level exceeding 60% during the same period.

The smartest economies don’t just extract resources—they create high-value products and services.

Imagine if Australia became known for its world-leading AI companies or climate-tech startups instead of being the world’s quarry. That’s the kind of economic shift we need.

6. Solving Big Problems (Instead of Just Talking About Them)

Startups aren’t just about making money. They tackle real-world challenges that governments and corporations often struggle to fix.

• Climate crisis: Startups are developing breakthrough clean energy solutions.
• Aging population: Healthtech startups are creating new ways to care for people.
• Education gaps: Edtech startups are making world-class learning accessible to everyone.

When we support startups, we support problem solvers—people building a better future for Australia and the world.

7. Keeping Aussie Talent Here (And Attracting More)

One of the most significant risks Australia faces is brain drain.

Many of our best and brightest entrepreneurs are now moving to the US or Europe because the funding, support, and opportunities are better overseas.

A stronger startup ecosystem means more people stay in Australia to build their companies—and it attracts top global talent to work and invest here.

8. Encouraging a Culture of Risk-Taking and Entrepreneurship

Recent data indicates that Australia's entrepreneurial landscape is facing challenges. In the 2023 IMD World Competitiveness Rankings, Australia was placed 61st out of 63 countries in the 'entrepreneurship' measure, highlighting a significant area for improvement.

Australia's one-year business survival rate is notably low compared to other OECD countries. Only about 50.8% of new businesses in Australia remain operational after their first year, indicating potential systemic issues in supporting new ventures.

These statistics suggest a need to foster a more robust culture of risk-taking and entrepreneurship. Encouraging innovation, providing better support systems for startups, and creating an environment where entrepreneurs can thrive are essential steps toward enhancing Australia's economic future.

Final Thought: Why You Should Care

Start-ups create jobs. They drive innovation. They keep our economy strong.

The next time you hear about a small Aussie startup trying to make it big, remember—they might just be building the next billion-dollar success story.