How does local government create an enabling ecosystem for startups? 20

What roles and actions are available to local governments in the development of an enabling ecosystem for startups?

“The choice is ours to make: we can either invest in the development of a knowledge economy in which startups can flourish, or we can maintain the status quo and forfeit Australia’s prosperity and competitiveness."

Professor Jana Matthews, StartupAUS Director and ANZ Chair of Business Growth, University of South Australia

Context:

A flourishing startup sector is a strategic priority for the City of Melbourne. We want to ensure the city is home to bold ideas, an entrepreneurial spirit and a well-connected, tech-savvy community of thinkers and business leaders.

The dividends are well documented. High impact startup organisations that scale nationally and globally generate employment, stimulate the broader local economy, and add vibrancy to the culture of the city.  In Australia, the tech startup sector has the potential to contribute $109 billion or 4% of GDP to the Australian economy and to generate 540,000 jobs by 2033 (PwC 2013).

Such jobs have a high multiplier effect - three times larger than the extractive industries for example, and much higher rates of labour productivity (StartupAus, 2015). Their rapid emergence can also create “a snowball effect” in which a city enhances its capacity to further develop talent and businesses as well as enhancing its appeal as a base for expanding international startups. The City of Melbourne makes an important contribution to the liveability of the city, which the startup community has also told us is valuable in attracting and retaining talent. 

And while there has been much discussion about the most appropriate roles and actions of national and state governments in fostering an enabling ecosystem for the startup community, little discussion has been devoted to the roles and actions available to Australian local governments, particularly the capital city local governments that govern the inner city municipalities in which most startup activities are clustered.

Local governments have the advantage of being the closest to the ground, and best positioned to consult and work with those in the startup community, alongside the State and Commonwealth governments. So how can local governments contribute to the development of the right conditions for the growth of startups?  What is their unique contribution to this critical challenge for the country?

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