Tech startups in rural areas are increasingly viable as internet access improves – StartupSmart
The coordinator of a leading rural coworking space says there are a number of big benefits to starting up in the bush, as ACMA figures show users in rural Australia are more likely to shop online than their big city cousins.
According to recently released ACMA report based on figures collected by Roy Morgan research, titled Regional Australia in the digital economy, there is still a significant digital divide in Australia between regional and urban areas.
However, despite this, a larger proportion of the population engages in online shopping in non-urban areas than in the major capital cities. The figures reveal 25% of people in rural and regional areas have purchased a product or service online, compared to just 21% in the major capital cities.
Liam O’Duibhir, coordinator of CoWS Near the Coast in Bega, told Private Media there are strong local business opportunities for startups in rural areas for web design, system support, software engineering, innovative product and service development.
“One of the greatest assets of any region or community outside of metro is specialist domain expertise,” O’Duibhir says. “This can be in fields as diverse as agri-business, tourism, community services or education, but every town and village in Australia has one person, or a group of people, who are particularly good at what they do.
“Linking these people to skilled technical people who can build a web solution, or mobile app, that encapsulates this specialist acumen, is the great untapped tech sector of regional Australia, in my opinion.”
O’Duibhir says access to funding, people networks, and talent are by far and away the biggest obstacles rural startups face, and negotiating around these challenges requires a lot of energy and imagination.
“But as Pete Cooper, Director of Innovation at UTS (and founder of the Start Society) often advises, ‘scarcity is one of the best drivers of innovation’,” O’Duibhir says.
“So, not having ready access to these benefits means people in the regions have to come up with their own solutions and, in our experience, the results can be surprisingly good.
“For example, I think our networks, albeit small, are very ‘tight’, and we have had to explore new funding lines that metro startups may not consider. And in terms of the talent pool, we have to grow our own…so we have to work doubly hard to recruit both young people and skilled sea and tree changers.
According to O’Duibhir, because overheads in Bega are only a fraction of the costs in metro areas, the cash burn rate of startups is much more forgiving. This gives them more time to develop the quality of their products, or source additional lines of funding.
“CoWS has acted as a beacon to anyone and everyone in the community who has ever cared about innovation, or wanted to look at doing things differently,” O’Duibhir says.
“It has been a huge conversation-starter with many of the region’s community stakeholders, and because we busted our chops to introduce something new and vibrant, it has given us a legitimacy far beyond what we could have every achieved without it.
“And there are significant intangible benefits too. The lifestyle balance means your general health and well-being is better maintained, in my opinion, than if you have the added pressures and stress of daily commutes through traffic, or just the atmospherics of the higher intensity environment that cities, by definition, support.”
ACMA’s figures also show the number of people in Australia’s major capital cities with an internet connection at home has increased from 78% in 2009 to 84% in 2013, or six percentage points. In that same time, in non-urban areas that percentage has only increased from 70% to 72%, or just two percentage points.
However, the percentage of major capital city households with a broadband connection at home in major capital cities has increased from 68% in 2009 to 84% in 2013, while in non-urban areas it increased from 52% to 72%. In other words, a greater percentage of non-rural homes now have broadband access than capital city homes had in 2009.
Meanwhile, while the use of internet on mobile phone handsets has increased from 12% in 2009 to 49% in 2013 in the major capital cities, it has increased from 5% to 32% in non-urban areas.
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