Innovation is more than a buzzword into one of Australia’s largest provincial cities, Geelong.
The Victorian city joins South Australia’s Adelaide in establishing an innovation hub in which tech startups are encouraged to set up shop amid a culture that encourages digital disruption in what is already a multi-billion dollar industry for the two states.
Replacing manufacturing with start-ups
Working with private enterprise is the startup initiative LaunchVic , nurtured by a state government $60 million investment. As in Adelaide’s Tonsley, Geelong’s digital innovation drive is helping fill an employment and industry void following the departure from the area of a major car manufacturing business.
It is bringing together leading-edge institutions and companies to connect with startups, business incubators and accelerators in a high-value industry, research, education and residential precinct, says LaunchVic CEO Kate Cornick.
Cornick says Geelong’s transition to an innovation district is integral to the state’s economic development. The shift involves creating an operating environment for manufacturers to innovate and grow through connections to research, education and collaboration.
“The Victorian economy is sound but needs renewal,” she says. “Over the last 30 years, Australia’s manufacturing employment has declined steadily with Victoria being the hardest hit losing around 30,000 jobs.
“Cities, regions and countries are aggressively seeking to unlock new sources of high-value jobs and have identified investment in startups and entrepreneurs as critical for a broad-based, future-proofed economy. Some of Victoria’s high-value jobs will be created by simply doing things smarter, for example by using technology to drive productivity and create value.”
Traditional manufacturing is in decline in Geelong (Photo: Bloomberg)
Cornick says LaunchVic will provide capital “and the right environment for entrepreneurs to develop, incubate and grow early-stage innovation businesses”.
“Startups create a pipeline of new companies and jobs. For example, firms like SEEK have grown to become multi-billion dollar companies, providing high-paying jobs and consuming many professional services.
“Startups also play a critical role in disrupting how things have previously been done and, as a result, they renew as well as displace traditional industries. By introducing new products, services and processes, startups contribute to a more competitive, innovative and globally connected economy forging new ways of doing,” she says. “Entrepreneurs tap the underutilised knowledge that resides in our universities and research institutes turning ideas into economic value and creating wealth in the process.
“LaunchVic’s objective is to launch a startup culture in Geelong that will establish the city as a global centre for innovation and entrepreneurship.”
“By introducing new products, services and processes, startups contribute to a more competitive, innovative and globally connected economy forging new ways of doing.”
The Runway project, led by CEO Peter Dostis, secured $1.25 million and acts as a catalyst for innovation in the region, creating new businesses and jobs through the provision of mentoring, networks, training and access to venture capital.
Entrepreneurship is not new to Geelong, Dostis says, with universities and local chambers of commerce having encouraged innovation as car manufacturing slowly declined.
“How to create an innovation environment starts in schools by teaching students about start-up principles and entrepreneurship, and Geelong’s universities have been doing that for years as traditional manufacturing has been lost to the region,” he says.
“Runway is more than an incubator or accelerator. It’s about how we create an entire ecosystem to support start-ups – how we attract them here, how we keep them here after exiting the program and establishing their businesses. We want them to remain in Geelong. We teach people how to transform an idea into a business, and that includes how to run a business.”
LaunchVic has also provided $450,000 to Dimension Data and Deakin University, an AIM Affiliate Member to establish a cyber security incubator at Deakin’s Waurn Ponds campus. The incubator will accelerate the development of unique cyber security solutions and help address the skills shortage within the industry in Australia.
THE ROLE OF GOVERNMENT
The Geelong Region Innovation and Investment Fund (GRIIF) is a joint venture between the Australian and Victorian governments, Ford Australia, which shut down its manufacturing operations in Geelong in 2016, and aluminium manufacturer Alcoa, which left in 2014.
The GRIIF allocates grants to boost employment and support innovation in the region. In November 2015, the fund handed out $11.2 million to seven local businesses.
Victorian Minister for Small Business, Innovation and Trade Philip Dalidakis says an Innovation Expert Panel will also help strengthen the state’s position as an innovation and tech hub. The panel comprises entrepreneurs, experienced in turning bright ideas into commercial reality.
“As a state, we can be the number one destination for technology and startups in the entire Asia Pacific region,” Dalidakis says. “In the past year alone, we have seen global tech leaders like Slack, Square, Stripe, Zendesk, Pocketmatch and GoPro all choose Melbourne as their regional headquarters. They’ve joined our local success stories – Nitro PDF, SEEK, Catapult, Red Bubble, CultureAmp and Appster.
“We have also done a lot of work to position Victoria as a cyber security powerhouse, so that we can capture a large slice of the global industry now worth an estimated US$71 billion and growing at a rate of 10 per cent per annum.”
An aerial view of Geelong and Corio harbour (Photo: Getty Images)
As for Geelong following Tonsley’s successes, the minister says Victoria is already a major contributor to the nation’s $79 billion digital technology business, making tech bigger than traditional industry sectors such as agriculture and retail.
“Victoria’s digital technology industry currently generates annual revenues of around $34 billion and exports worth about $3 billion,” he says. “Currently, the state’s digital technology workforce comprises around 160,000 ICT professionals. By 2020, the forecast value of the Australian digital economy is $139 billion, and Victoria’s could be worth $50.8 billion.
“Digital tech employment is predicted to grow 70 per cent faster than Australia’s overall employment growth over the next decade. And, research shows that for each new technology job, five additional jobs are created in other sectors.”
Professional services firm PwC, Cornick says, estimates the Australian tech startup sector alone has the potential to contribute $109 billion or 4 per cent of GDP to the Australian economy and 540,000 jobs by 2033.
“Successful cities build on their unique strengths,” she says of Geelong’s future. “It’s about an active approach and supporting those entrepreneurs with ideas to be able to convert those ideas into businesses – so it is important to surround entrepreneurs who invest their own capital and sweat into building businesses with organisations and networks to help them succeed such as accelerators, universities and investors.”