A new report from the Bankwest Curtin Economics Centre reveals Western Australia's startup and innovation ecosystem requires targeted reforms and investment to unlock its full potential, calling for improvements in talent development, gender diversity and access to capital and infrastructure to support a more diversified economy.
The report, titled 'Dare to Venture: Startups and the innovation ecosystem in Western Australia', highlights WA's strengths in mining, energy and resources but points out that the state's reliance on these sectors limits growth in emerging fields such as artificial intelligence, biotechnology and data analytics.
Co-author and Bankwest Curtin Economics Centre Senior Research Fellow Dr Daniel Kiely said WA was at risk of falling behind other states, particularly in industries that could contribute significantly to economic growth, employment and prosperity.
"Startups drive innovation, productivity, job creation and social wellbeing and while WA's startup ecosystem has grown significantly over the last decade, it is still small compared to other regions, with a startup labour force of just 9,650 workers in 2024," Dr Kiely said.
"WA's startups are heavily concentrated in industries like mining, oil and gas, and energy while emerging sectors such as artificial intelligence, FinTech, biotechnology and health are underdeveloped.
"But startups do not emerge in a vacuum. Investing in leadership, talent and skills, as well as in knowledge, through R&D investment, will help bridge the gap with other states and build resilience in the WA economy."
Strengthening WA's innovation ecosystem could create up to 350 new businesses, generating 3,500 highly skilled jobs and broader economic benefits, the report found.
Co-author and Bankwest Curtin Economics Centre Senior Research Fellow Dr Abebe Hailemariam said key recommendations from the report include initiatives to increase tertiary and vocational education in high-growth fields, provide additional supports to incubator and accelerator programs, and attract investment into new industries to close the gap with eastern states.
"Key drivers of startup success include access to funding, entrepreneurial experience and talent," Dr Hailemariam said.
"Gender disparities do exist, with male founders having a higher exit success rate via acquisition or IPO. But much of this gap can be closed by addressing factors like access to funding and enhancing the founders' experience.
"The report calls for targeted policies to develop talent, improve access to grants and address gender disparities, ultimately boosting WA's economy and fostering a more diversified and resilient innovation ecosystem."
Key findings and recommendations:
- Leadership and skills development: Policies aimed at fostering leadership, talent and financial support, especially in underperforming regions, are crucial.
- Educational initiatives: Targeted programs to increase tertiary and vocational education in technology and business management will help meet talent demands.
- Incubator and accelerator support: Greater support for programs that develop entrepreneurial skills is essential.
- Attracting new investment: Encouraging investment in new industries will ensure WA diversifies its economy and catches up with other states.
- 'Brand WA' promotion: Efforts to build WA's reputation as a prime location to live, work and invest must continue.
- Boost R&D spending: Australian public and private R&D investment per capita must align with OECD averages to compete globally.
- Grant certainty: Providing ongoing and impactful grants for startups and the ecosystem is essential to signal a strong commitment to economic diversification.
- Continuous monitoring: Tracking ecosystem performance and evaluating programs over time is vital for identifying trends and enhancing support strategies.
