Tasmania: Getting to the core of innovation in the Apple Isle

Insights from spending 24 hours in Australia’s only island startup ecosystem.

Last week I had the pleasure of jetting to Hobart, the capital of Australia’s least populous state, Tasmania, on a research mission to understand the inner workings of its fledgling startup economy.

With just over 570,000 residents, Tasmania has a population roughly 1/10th the size of the country’s two biggest cities, Sydney and Melbourne.

Hobart was founded in 1804 as a British penal colony and is Australia’s second oldest state capital, making up over half of Tasmania’s small but mighty population.

Despite its diminutive nature, I found a welcoming community who were honest about the challenges that impact their growth and deeply passionate in the face of adversity.

A familiar story on a micro level

When looking at the challenges that face Tasmania in growing its innovation economy, it’s hard not to see it as a miniature version of Australia.

Comparing its ecosystem to the mainland feels like an analogy for how the Australian startup ecosystem competes globally.

The same problems of:

• island isolationism makes it a struggle to keep both culturally and economically connected
• a tall poppy mentality limits the ambition to stay humble and local
• A two-way talent crisis with top talent looking to move overseas while a battle to attract the brightest international minds is an uphill struggle
• and infrastructure and investment that is still decades behind the larger Innovation hubs worldwide.

With these obvious barriers for entrepreneurs, it’s no wonder that Hobart ranked 554th in this year’s Startup Ecosystem Report produced by StartupBlink.

Wedged halfway between Caxias do Sul, Brazil (553rd) and Catania, Italy (555th), which with no offence meant, are hardly global powerhouses.

According to StartupBlink’s Ecosystem report, Hobart has the 9th biggest ecosystem in Australia, some way behind the country’s major cities. Source: LinkedIn

The seedlings of something bigger

To quote straight out of the entrepreneurs’ handbook “the journey of a thousand miles, starts with a single step”.

And despite its challenges, the Apple Isle has taken more than a few big leaps already.

The epicentre of the ecosystem, especially in the southern city of Hobart is driven by Enterprize Tasmania, a state government-backed initiative.

Enterprize supports founders of innovative, high-growth potential businesses by providing world-class education, mentoring, events and spaces, with physical spaces in both Hobart and Launceston — the state’s second entrepreneurial hub.

My visit just so happened to coincide with a Demo Day for their Born Global Incubator program, a 12-week program helping young startups take their ideas to market.

The eight startups pitching, which included concepts like “Defeat the Beat” looking to put the nail in the coffin of the infamous Beep Test and Charsoo — a digital marketplace to help SMEs inspired by the market culture of Iran, makeup 143 enterprises that have been through the program since its inception in 2018.

The incubator, which has been graciously backed by Aurora Energy, Tasmania’s leading energy retailer, is now turning its sights on attracting talent from what the locals call “the mainland”.

Pivoting to programs that attract interstate entrepreneurs to the island or those that teach the basics of entrepreneurship.

Born Global’s 2023 Demo Day. Source: LinkedIn

A lifestyle destination

Bringing more Australians over from the mainland isn’t just something that ecosystem builders are doing.

Some of the state’s success stories are also looking beyond Tasmania and even the country to secure top talent.

Procreate, an industry-leading digital art and illustration app for iPad, with 85 employees, based in north Hobart, is pitching Tasmania as a perfect lifestyle destination for potential employees.

It’s hardly surprising given the laidback way of living, world-class produce, and abundance of nature on offer. It’s also a huge contributing factor to the 1.1 million tourists that visit the state annually.

This strategy has also been applied by other smaller local innovation hubs, such as the Gold Coast, Byron Bay, and Queenstown in the past.

The other thing that Tassie, as it’s nicknamed across Australia, has going for it, is its tight-knit community.

With one local going as far as saying “If you’re having a problem, you can just pick up the phone to the premier”, the highest government official in the state.

This begs the question: how do ecosystems like Tasmania use their size to their advantage?

The billion-dollar question

I think two strategies could help to supercharge Tasmania’s growing startup ecosystem.

1. Specialisation — Picking an industry niche or two and putting all of the resources, infrastructure and funding into being an industry leader in that field.
2. Globalisation — Forgetting about connecting with the mainland of Australia and employing a Day One global mindset.

In theory, the two would work perfectly in tandem.

Tasmania could position itself as the aquaculture and agriculture specialist of the APAC region, especially when it has access to assets like the CSIRO’s Marine and Atmospheric Research in Hobart and the University of Tasmania, which is already #1 in climate action globally.

The state boasts of some of the most reputed Australian produce. The Tasmanian salmon, single malt whiskey, and the eponymous Apple are some of its major exports. Tasmania is perfectly poised to double down on this.

The University of Tasmania’s Institute for Marine and Antarctic Studies in Hobart. Source: LinkedIn

Playing the (Tasmanian) Devil’s advocate

And then comes that global mindset.

Economies such as Israel and New Zealand, a more local inspiration, have been forced to adopt this due to their small population size and economy compared to their much larger neighbours.

Tasmania is in much the same position. No matter how much it grows, it will still follow on the coattails of the country’s larger economic powerhouses. Struggling to compete and losing major talent to the better-resourced mainland ecosystems.

So why not think bigger from Day One? After all, the state’s biggest innovation hub does have the title Born Global. So why not embrace it?

Don’t worry I’m not going to be campaigning for an independent Tasmanian country anytime soon.

Though, whatever’s next for the state, I will be cheering on from the sidelines. In the hope that we can someday see Tasmania as more than an annual trip to “get some fresh air” and instead as the jewel in the Australian startup ecosystem crown.

It’s impossible not to be an advocate, with a community so warm-hearted and authentic.

Dickie Currer is head of partnerships at Startup Victoria.

This article was first published on LinkedIn.