Opportunities for manufacturing in Victoria's startup ecosystem

Last month we hosted a Space Tank investigation into supporting manufacturing entrepreneurs at Fishermans Bend. We discovered the startup ecosystem has a lot to gain from embracing advanced manufacturing and the development of physical products.

While there are inherent challenges in supporting manufacturing and hardware startups at the grassroots, key insights on how to achieve this were refreshing and reassuring. We have the legacy industry strengths. We have tons of emerging talent. We have the ideas for how to support them. Most importantly, we have a method for de-risking investment into emerging talent in fields that require manufacturing. Stakeholders want to work together to extract the value inherent in this opportunity.

As one startup rightly points out, on one hand Australia has a strong manufacturing legacy and high engineering and design capabilities, on the other hand it is by far not a global leader in the software space. And yet, mainly due to investor pressure, our startup ecosystem focuses predominantly on digital-only startups that promise an allure of fast unicorn exits. The ecosystem has largely ignored startups who are developing hardware and physical products.

Everyone agrees it is important to correct this imbalance. We must create the conditions to grow industry and job value that suits our high-priced economy and highly educated talent – or we will continue to lose them to offshore ecosystems that better support them.

Oli Tod. "when stakeholders support manufacturing entrepreneurs, we all win"

The most intriguing insight is that as digital and physical worlds are merging in every possible way, we are finding the real need for value added manufacturing in over 50% of all startup categories. The collective value creation form this, if supported wisely, spills into multiple industry sectors, connects and strengthens our supply chains and creates gravity that will make Melbourne an epicentre for manufacturing innovation.

The group workshop was attended by key stakeholders from universities, leading corporations, defence contractors, health tech, aerospace and the City of Melbourne. Input into the workshop included insights from investors, startups, representatives from State and Federal Government, Launch Vic, industry groups and Accelerators from the Medtech and Agtech space.

Scott Anderson, "helping early stage manufacturers via realisable actions that deliver value to everyone, is the critical first step in maturing our startup ecosystem"

The enthusiasm and integrity in the group was palpable. There is a collective desire among stakeholders to get things done. Opportunities were discovered for mutually beneficial collaborations in high value market sectors. Importantly, accelerators in the agtech, cleantech and energy space say up to 50% to 60% of their cohorts require hardware and manufacturing support. They are expressing interest to partner with organisations like Space Tank to meet this demand. Startups that have been interviewed unequivocally state, the startup ecosystem must embrace manufacturing into the fold.

Watch this space - Space Tank will be releasing a report on findings and recommendations for growing startup capabilities within manufacturing and hardware fields.

If supporting manufacturing innovation excites you or you have something important to contribute, please contact us.