WA could see 350 new startups if ecosystem gets improved investment in talent, innovation: BCEC report

Strengthening WA’s entrepreneurial ecosystem could see 350 new startups and create as many as 3500 highly skilled jobs, Bankwest Curtin Economics Centre has claimed in a new report. The latest research from Bankwest Curtin Economics Centre to be released on Tuesday found WA startups were heavily concentrated in industries like minerals, mining, oil and gas, and energy. But that over-reliance on a narrow pool of sectors has limited the State’s growth opportunities in emerging fields like artificial intelligence; data and analytics; information technology; financial technology; biotech; and health-related industries. Report co-author and BCEC senior research fellow Daniel Kiely said WA startups were at risk of falling behind other States, particularly in industries that could contribute significantly to economic growth, employment and prosperity. “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 9650 workers in 2024,” Dr Kiely said. “But startups do not emerge in a vacuum. Investing in leadership, talent and skills, as well as in knowledge, through (research and development) investment, will help bridge the gap with other States.” There are just under 10,500 startups in Australia — including 1020 in WA, 4050 in NSW and 3542 in Victoria. The BCEC report said improvements to the ecosystem would lead to a greater number of startups in WA, with scenario modelling showing an extra 350 new firms could be create. This was about a 35 per cent increase on current levels. The report highlighted that in order to achieve these outcomes, an extra 8000 individuals would have to pursue tertiary qualifications, 1600 additional people with leadership skills, as well as a $440 million increase in R&D expenditure by business. BCEC has made several key recommendations for governments, businesses and key industry players in a bid to “deliver a startup environment that is recognised globally”. These included initiatives to increase tertiary and vocational education in high-growth fields, provide additional support to accelerator programs, and attract investment into new industries to close the gap with Eastern States. The report also investigated the key drivers for startup success, defined as an exit via initial public offering or acquisition. It revealed that a $100,000 increase in funding lifted the probability of success by 1.9 percentage points. Startups where founders have previous entrepreneurial experience also tend to have about a 5.8 percentage points higher chance of success compared to those without previous experience. Report co-author Abebe Hailemariam also acknowledged that gender disparities existed in the ecosystem, with male founders having a 53 per cent chance of a successful exit. This was in comparison to the 43 per cent success rate for female founders. “But much of this gap can be closed by addressing factors like access to funding and enhancing the founders’ experience,” Dr Hailemariam said.