New research reveals that the Victorian start-up sector is the State’s new jobs’ growth engine, with the number of startup jobs rising 10.75 per cent year-on-year between 2018 and 2020.
And, although the COVID pandemic has put the break on start-up employment growth – it declined to 8.1 per cent in 2020, down from 13.4 per cent in 2019, it is still outperforming the ABS’s 3.1 per cent pre-Covid estimates for the Victorian economy as a whole.
The Start-up Employment in Victoria, complied by dealroom.co in collaboration with LaunchVic, shows that 5900 direct new local jobs were created by homegrown start-ups between 2018 and 2020.
Start-ups less than five years old generated 39 per cent of new jobs, employing 2300 people. Businesses founded five to 10 years ago created 35%) of new roles, employing 2100 people. And companies over 10 years old provided 26 per cent of the new jobs in the state, creating roles for 1500 people.
The data demonstrates that as start-ups develop into scale-ups, job growth accelerates. The 115 scale-ups in Victoria have employed 2700 new people since 2018, 23 per cent of those roles having been created in the last two years alone.
Dr Kate Cornick, CEO of LaunchVic, said that the research highlights the importance of small and scaling start-ups to new job creation in Victoria.
“Based on current growth rates, dealroom.co has projected that by 2025 Victoria will have 3000 active start-ups that employ twice as many people as the sector did in 2018 – which could be 51,400 people,” Dr Cornick said.“This exponential growth is something start-ups are renowned for and this report confirms this growth is happening at a local level, which is incredibly exciting.
“A future where start-ups represent a major part of the new jobs being created and value to the economy is a lot closer than we think,” Dr Cornick added.
Yoram Wijngaarde, CEO and Founder of Dealroom.co said, “This report confirms that start-ups have become a leading source of job growth and are more resilient to external shocks. Meanwhile, the global economy is transitioning to digital, making a strong entrepreneurial and innovative economy so vital.
“Victoria’s ecosystem is becoming one of the fastest growing emerging ecosystems.”