At a time when start-up hubs are popping up all over the place, some people may rightly question: what’s the big deal about a new office space for the start-up community in Sydney?
But it’s not just entrepreneurs or Sydney-siders who should be excited about the new $35 million 17,000 square metre space set to open later this year in the CBD’s Wynyard Green. The benefits will spread far wider as the first truly organised start-up precinct in Australia and the largest in the Southern Hemisphere produces a “density” of innovation we haven’t seen before in Australia.
Yes, there’s new notable start-up hubs planned in the likes of Melbourne. In fact, there’s even a new incubator in the regional town of Bathurst. Clearly, start-up hubs are not “new news” in themselves.
The news is the greater acknowledgement of what these hubs do and it’s clear Sydney is taking a leading role.
More new businesses will be nurtured. They’ll create more innovative products and services, many of which are likely to support other businesses to become more efficient. Vitally, as they grow, they’ll also employ more people in Australia, and we’ll attract even more investment into our national economy.
We experienced some of this at Stone & Chalk, the not-for-profit fintech hub I played a role in establishing in late 2015 that has gone on to help Sydney rank in the top ten cities for fintech according to a recent report by Deloitte.
When we opened the doors at Stone & Chalk, the fintech activity of dozens of start-ups became more organised. It gave these start-ups more visibility, creating a platform to be able to better engage with regulators, government and the financial services industry. Importantly, investors started to pay attention and today those investors can visit the 80 resident founders in one place.
Stone & Chalk will move into the new Wynyard Green precinct as an anchor tenant, alongside tech start-up hub Fishburners, Tank Stream Labs and others. By having twice as much floorspace, this community of founders will quickly grow in terms of both individual company size and number of companies. The length of the waiting list to get in gives me no doubt about that.
By creating greater density in the new hub, hundreds of start-ups will come together, and you’ll see free radical interactions, random encounters and the collision of ideas – this is how innovation happens and accelerates. We recently experienced this within the Reinventure-backed portfolio of companies, a couple of which reside at Stone & Chalk, when Indebted, Auror and Assembly came together to offer retailers a next gen solution in crime and loss prevention in their businesses.
In Silicon Valley, start-up density occurred organically. In London, New York and other major global hubs, a mix of planned and organic hubs are accelerating innovation, creating new jobs and supporting economic growth.
Last year on a trip to Israel – which has the largest number of start-ups per capita in the world – I was particularly inspired by just how deliberate they were about designing infrastructure for innovation over the long term. In Beersheba, for instance, they have brilliantly architected a precinct by clustering together large global technology R&D centres, a huge start up hub, a military research facility, a university and a train station (public transport is vital for entrepreneurs). In five years, we’ll see a range of new high growth technology companies coming out of this precinct.
For Australia, Wynyard Green will be the epicentre around which an ecosystem will grow. WeWork – a shared office space start-ups can pay to use – is already just down the road at 333 George Street and a whole bunch of other interested businesses will gravitate towards the area in time (and let’s hope new bars, cafes and restaurants!).
As a nation, we are at a critical juncture as we transition to a new economy navigating the likes of automation and artificial intelligence that are changing the way companies operate. Innovation is vital and start-ups need a place to go to get on with the job. Sydney’s new start-up hub will help provide the inspiration we need.
Westpac is the major investor in Reinventure Group, the venture capital fund that invests in fintech start-ups, co-founded by Danny Gilligan.
The views expressed are those of the authors and do not reflect the Westpac Group.