22/03/2022 - 14:00

Perceptions of Perth not supported by data

22/03/2022 - 14:00

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Believe it or not, the conditions for diversification are here.

Perceptions of Perth not supported by data
Perth is not normally perceived as a tech-savvy city. Photo: David Henry

We all love a league table, particularly those that show geographic rivalries in areas such as liveability, wealth or ease of doing business, which are regarded as good measures of how well our governments are doing.

When it comes to things like our status in the world of technology and innovation, we have low expectations.

You know the line: we just dig things up and ship them out.

That seemed to be validated when I saw the list titled World’s Most Tech Savvy Cities, announced by UK publisher money. co.uk, an online comparison service that generally focuses on financial products.

In a break from its usual practice, it compared a range of cities on factors such as technology job earnings, successful startups and the performance of local universities when it comes to relevant disciplines.

Perhaps unsurprisingly, the top six cities and eight out of the top 10 were US based.

Only Vancouver, in neighbouring Canada, and Stockholm in Sweden were considered good enough to reach the top of the league table.

A broader group of 30 cities was published, with Melbourne and Sydney coming in at 20 and 21, respectively.

I am not sure if it is politically correct to suggest this, but it did look like the two lowest-ranked cities, Cape Town in South Africa and Bogota in Columbia, were added just to give their respective continents representation.

I say that because Perth would easily have climbed into the top 30 if these two did.

From what I could tell, Perth would have been much further up the list.

As you can see from the graphic provided, the Western Australian capital beats even a few of the top 10 cities on several measures, and by a quantum that make it seem a threat, if not eligible.

The methodology for calculating the ‘Tech Savvy Score’, which placed Denver in the US atop the pack, was not clear to me.

I would also argue that while money.co.uk said it had included cities for which there was appropriate data – and I found everything required for Perth to make a legitimate nomination – some of the databases were a bit skewed to the US or the Northern Hemisphere.

For instance, it used Crunchbase to measure startups in each location, but local people in the tech sector I spoke to believe other databases (such as Data & Insights) are more accurate.

When I used Crunchbase and filtered it in a way that showed me similar results to the top 10 Most Tech Savvy Cities, I found only 107 companies in Perth.

Conservative estimates put that local number at 250 and most likely as much as 500.

That gives Perth up to 24 startups per 100,000 of population, a number above Vancouver and not far off places such as Dallas in the top 10 as well as Singapore, which is just out of it.

That number is also well above Sydney and Melbourne.

When it comes to unicorns, that is even more subjective.

Firstly, the money.co.uk research seemed to think Sydney and Melbourne only had one each, but the database they used shows the NSW capital has three and the most locked-down city in the world has two.

Then again, that depends if you count the city where it was founded.

Canva could be a Perth company in that regard, although it is fair to say that having successful tech companies uproot and leave doesn’t make you look like a tech-savvy city.

Nevertheless, I’d prefer to include Canva because it started here as well as VGW Holdings, formerly Virtual Gaming Worlds.

VGW would easily make a unicorn list if its $308 million half-year profit was anything to go by.

If that (admittedly) pre-tax profit figure was annualised, it takes less than three times earnings to see a valuation of $US1 billion, the generally agreed worth of a unicorn.

I also understand we can’t just use data that suits us.

I have adjusted the download speed registered by removing an outlier provider that did not seem right.

If that speed was left in, Perth topped the globe.

The speed in the table is a guesstimate.

Even without the super broadband speeds, I would suggest conditions are pretty good here for us to be called a tech-savvy city.

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