Australia has a burgeoning startup hub landscape and, opening next year, Barangaroo’s Lighthouse precinct is set to become the biggest yet. But are startup hubs the answer, or just the beginning of the answer?
By 2050 Australia is in danger of slipping out of the G20 and becoming the world’s 29th largest economy, according to a PricewaterhouseCoopers report. We’ve already been dropping on the Global Innovation Index. We currently sit at 19th, behind not only South Korea and Singapore but also New Zealand. Clearly, there’s a need for a turnaround. But signs are, that this may already be happening. It starts, appropriately enough, with startup hubs.
A startup hub is essentially any commercial district that has a concentration of new, innovative businesses. In the same way that a good workplace culture allows people the freedom to collaborate on fresh ideas for the business, a startup hub does the same on an intercompany level.
It can give everyone in the district a sense that they are the next great entrepreneurs, but it goes beyond pride. “Being surrounded and supported by the who’s who of the sector is a critical step to shortening that process of ideation and execution,” explained Co-founder and COO of Pocketbook, talking to the Committee For Sydney.
Say, for instance, you’re struggling with the latest changes to Google’s increasingly intelligent search algorithm. Well, the people from a nearby company that you sometimes have lunch with just solved their problem, why not ask them?
There are more than a few such hubs in Australia’s major cities – from Cicada Innovations (formerly ATP Innovations) in Redfern, Sydney to The York Butter Factory in Melbourne – and not one of them occurred naturally. As Dean McEvoy, chief executive of Tech Sydney, told the Financial Review, “The density of startups around Palo Alto or San Francisco can never happen organically in a country the size of Australia, so we have to create it.”
Take for example the planned Lighthouse precinct in Barangaroo. The rent for such state-of-the-art offices with water views is more than startups could or should pay. But fostered by Vivant, a consultancy known for the creation of mobile technologies for Qantas and Commonwealth Bank, the plan for Lighthouse is to underwrite the rent by taking advantage of favourable legislation and the desire of larger companies to sponsor intriguing new initiatives. By choosing to place them in a hub, the bigger company (a Facebook or Microsoft) increases the chance that their individual startup will succeed.
However, as exciting as hubs are, more has to happen if Australia wants the 500,000 jobs and $100 billion contribution to GDP PricewaterhouseCooper research predicts the startup economy could add by 2033. The 2016 Crossroads report authored by Startup AUS has 14 recommendations on how this might be achieved – increasing support for startup hubs is only the first of them.
They also propose the creation of a single national innovation agency, improvements to the research and development tax incentive and, importantly for HR departments, programs that would both increase Australia’s local talent pool and measures to make accessing the talent pools of other nation’s easier.
How thinking about startup hubs can help HR
Startup hubs are all about a buy-in culture and those random interactions that lead to great ideas. These lessons translate to the world of HR, here’s some of them with links to HRMonline articles that have touched on them.
- Is collaboration the new innovation? Read what this expert has to say.
- Open-plan offices can lead to interdepartmental collaboration but are they right for your company?
- The opposite of a buy-in culture is one that’s toxic. When they occur, who do you blame?
- Innovation is great but don’t forget the next step, implementation.