Melbourne’s innovation crisis is about culture – and what comes next

While Melbourne prepares for another glossy startup gala, let’s talk about what won’t be on the menu.

• Victoria’s startup agency has locked away $160m+ in public funding—yet no grassroots event support since 2019.

• VicGov spent $7 m+ on DIF (Digital Innovation Futures)—and it quietly shut down.

• Melbourne Convention Bureau backs only international events (e.g., C2, GEC) with $2 m+, but not local ones.
• According to Startup Genome (2022–24), Sydney’s ecosystem value is $55 bn, while Melbourne sits at just $18bn — less than one-third. On nearly every other metric, Sydney outperforms Melbourne by at least twofold.

Despite millions poured into strategy documents, sector roadmaps, and internal KPIs, Melbourne’s startup ecosystem remains just one-third the size of Sydney’s. We’re not accelerating. We’re stagnating—politely, professionally and publicly.

Victoria’s startup agency has locked up $160 million+ into a silo. But that hasn’t translated into ecosystem-wide uplift. Why? Apparently the board was against it.

The truth is, whatever momentum we had flatlined in 2020. And if we continue on this current trajectory, we won’t become a leading startup hub—we’ll be lucky to have a functioning ecosystem at all. With no support, no culture and no compelling reason to stay—startups will simply go elsewhere.

In 2019, the heartbeat of Melbourne’s innovation scene—grassroots events, community-led platforms, indie creators—was cut off. The nerve system that kept us connected, inspired and growing together was quietly replaced by infrastructure and annual report parades.

We welcomed their leaders on stage. Gave them the mic. Shared their mission.

But when the grassroots asked for support, the response was simple: “That’s your problem.”

So many didn’t.

They collapsed. Quietly. Permanently.

Events that changed lives, careers and companies—gone.

But numbers don’t tell the full story.

The real value of community-driven innovation was in the collisions it created:

• Judy Anderson-Firth wouldn’t be leading Euphemia without meeting Dom Pym at Pause Fest.
• Girls in Tech wouldn’t have launched in Australia if I didn’t invite Adriana Gascoigne to come to Melbourne.
• Zero Latency might not have gone global so fast if I didn’t discover and promote them.
• Kate O’Keefe might not have returned from Cisco SF to co-found Heatseeker here—and for Dom to invest.

These aren’t just stories. They’re proof of what happens when ecosystems breathe.

You can’t engineer this in a spreadsheet.

You can’t mandate it in a strategy doc.

Melbourne didn’t lose its edge because we lacked talent or ambition. We lost it because we sterilised the conditions where creative collisions happen.

And it’s not just the trauma of the last five years. It’s what comes next that concerns me.

We have no forum in Melbourne to collectively imagine the next 10 years.

So let me offer just three trajectories:

1. AI, Robotics, and the Collapse of Economic Models
2. The Largest Wealth Transfer in History—to Women
3. The End of Disease by 2035

Where is the Victorian forum shaping our role in these futures?

Where are the voices preparing startups for these seismic shifts?

Because it’s not happening behind closed doors. 

And it certainly it’s not government-led.

It’s going to happen in the places we gather.

Where people collide. Ideas spark. Trust builds.

It’s going to happen in culture.

And that’s something no agency can manufacture. After 15 years of building platforms for connection, I know what culture can do. That’s why I still believe it’s worth fighting for.

I’m hopeful that City of Melbourne’s Lord Mayor Nick Reece and Cr Andrew Rowe will help bring back the vibe and vibrancy this city desperately needs through the new Innovation Development Fund.

And to Melbourne’s unicorns, future founders, and anyone who wants to see this city thrive—now’s the time to show up, step in, and lead forward.

So, my big question to you all is:

Why can’t we have culture and infrastructure?

• George Hedon is the founder of Pause Fest and the Pause Awards.