‘Orange is the new Palo Alto’: Why the next Atlassian, Canva will be from the bush
A new generation of home-grown start-ups could come from regional and rural Australia as the world grapples with the challenge of feeding a growing global population estimated to hit 10 billion by 2050.
Phil Morle, a partner at CSIRO-backed venture capital firm Main Sequence, said Australia was uniquely positioned to be a breeding ground for food, agriculture and biotech start-ups because of its vast land mass, as food insecurity emerges as a key challenge around the world amid supply chain issues exacerbated by the pandemic and geopolitical tensions.
He pointed to lab-made dairy milk Eden Brew, plant-based meat v2food, and renewable energy storage start-up MGA Thermal as examples of a new cohort of start-ups based in regions such as Orange, Wodonga and Newcastle instead of metropolitan cities, which traditionally have been the hotbed for Australia’s tech darlings Atlassian and Canva.
“They need land to do it. This is not going to happen in eastern Sydney – it’s going to happen in Orange, in far-north Queensland … on the other side of the Blue Mountains, or in Shepparton,” Morle said.
“The production facilities, for the talent, for the land, and for the feedstock, are going to rise in regional Australia. These will be very, very big companies,” he said. “Orange is the new Palo Alto.”
Main Sequence considers three dominant forces coming together when investing in a biotech start-up: the importance of sovereign capability; the requirement for food to be made sustainably and without being emissions-intensive; and science readiness, or the maturity needed for the solution to be deployed and commercialised.
Morle also argued that many skilled workers in traditional industries such as coal mining, agriculture or power production were already based regionally and able to use their transferrable skills in these nascent sectors.
“If you look at Australia and you look at our skill sets, that’s where those people are – highly qualified engineers, savvy people who can weld, do electrical jobs that can fabricate new devices – these people all live in the bush already, serving those industries.”
While Sydney and Melbourne still hold first and second place as Australian cities with the best start-up ecosystems, every Australian state has invested more money in recent years into boosting local start-up hubs, such as Byron Bay, Newcastle, Wagga Wagga and Bathurst in NSW; Geelong, Latrobe, and Mildura in Victoria; and Noosa, Ipswich and Rockhampton in Queensland.
During the pandemic, more than 11,000 Australians moved out of Australia’s capital cities in the September quarter of 2021 alone as the ubiquity of remote work allowed for people to seek more affordable housing outside the capital cities.
Morle acknowledged that tempting some to work in regional or rural areas was a “chicken and egg” challenge but played it down as an obstacle, saying workers from those communities would want to remain there.
“The end status, though, [is] that’s precisely where you will go, because that’s where those jobs are,” he said. “A lot of people that have the skills are not hot-shot entrepreneurs, they’re people that work for a coal mining company right now and they’re just amazing engineers, and they live in Mackay or Orange. They’re there, and we have to keep them there.”
Australia’s technology sector overall contributes about $167 billion or 8.5 per cent of Australia’s GDP, according to an August 2022 report by peak industry body Tech Council.
Key industry heavyweights from the agriculture sector have been pushing for Australia to invest more in local food manufacturing facilities to create greater profit streams from new industries, such as plant-based protein, cautioning against overreliance on selling raw commodities such as beef and wheat.
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Source: Thanks smh.com