• New report ranks Sydney 23rd out of 30, down from 16th in 2015, while Melbourne was outside the top 30
• The removal of Turnbull as PM may have played a role, as innovation slips off the federal government agenda, says lobby group
• There are some signs of life, with state government investments in tech likely to pay dividends in 2-3 years

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Sydney is sliding down the ranks of the world’s best cities for startups, while Melbourne ranks outside the top 30, according to The Startup Genome Global Startup Ecosystem Report on released Thursday.

The report lists Sydney as the world’s 23rd best startup ecosystem, down from 17th in 2017 and 16th in 2015.

The result follows the removal of Malcolm Turnbull – who was vocal about government support for innovation – as Australian prime minister in 2018 and the decline of the 2015 National Innovation and Science Agenda, according to StartupAus CEO Alex McCauley.

“It’s obviously disappointing that Sydney has slipped down the rankings, [but] its’ not a surprise, we haven’t had innovation and startups a national focus for several years,” he told Business Insider Australia.

“If you take an eye off the ball you drop it.”

McCauley said the current post-Turnbull Coalition government needs more startup champions.

In a statement released Thursday, Professor Glenn Wightwick, deputy vice chancellor of innovation and enterprise at the University of Technology Sydney, said there was a need for a long-term approach to supporting startups and improving collaborations between the startup ecosystem, business, research and education in Australia.

“We know the jobs of the future in Australia will be shaped and created through the ideas, the innovation and ingenuity of our graduates,” he said “And as the country’s largest tech and startup ecosystem, Sydney needs a pipeline of the best talent, ideas and research from across the entire education system.”

To no great surprise, Silicon Valley ranked number 1, followed by New York, London, Beijing and Boston.

Vancouver and Hong Kong ranked below Sydney.

Some strength to Australia’s startups

However, McCauley said it’s not all bad news, as having an city in the top 30 is still a big achievement. Plus, the report ranked Sydney second for “connectedness”, with strong infrastructure and research and development incentives available for startups. Melbourne is identified in the report several times as a city to watch for startups, particularly in the area of life sciences and education technologies.

“That’s pretty good, that’s a good base to grow from,” McCauley said.

“Those are quite a lot of fundamentals that if you stack them all up and provide a bit of support stack up to a pretty competitive landscape in the things to come.”

The Progressive Policy Institute’s Australian App economy report found the number of app developers across Australia had grown 20.35 per cent between 2017-2019.

And earlier this year startup founders across NSW told Business Insider Australia what they wanted from the next state government, including tips such as taking inspiration from Victoria’s startup initiatives.

Government support needed to succeed

McCauley said Australia needed to get serious about tech to give Australia a smart future.

“We’re still focused on why we’ve been successful in the past and not how we’re going to be successful in the future,” he said.

“If you look at where the world’s biggest companies are going to come from it’s all going to be technology companies.”

He said what was really needed was support from the top and called on both sides sides of politics to make their support for tech clearer.

“Sydney and Melbourne are both growing, but it’s pretty clear that we haven’t given our full attention for how we set ourselves up for success,” he said.

“When David Cameron was [UK] PM he said that he wanted to make London the best place in the world to build a fintech company – now look at them.”

McCauley said support from state governments had been good and that some of the benefits from the creation of startup hubs in Sydney, Melbourne, Brisbane and Adelaide will start to flow through over the next 2-3 years.

“I would predict that we will grow over the next years, but that’s subject to a consistent level of support and the right policy setting to be in place to allow that to happen,” he said.

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