Innovation Case Study 2: Canberra’s Innovation Renaissance—An Ecosystem Model for Australia’s Future

John H. Howard, 1 April 2025

Innovation ecosystems are critical for economic resilience and long-term growth. Cities worldwide are striving to create environments that support entrepreneurship, research commercialisation, and technology development.

Canberra offers a unique case study of how a city traditionally reliant on public sector employment has evolved into a vibrant innovation hub, leveraging its world-class research institutions, government support, and strategic partnerships.

This study provides important insights into how cities can transform their economies through targeted innovation strategies.

Context

Australia’s capital city, Canberra, has transformed from a public sector-dominated economy into a dynamic, innovation-driven hub. Home to over 466,000 residents, with a broader regional population nearing 750,000, Canberra boasts Australia’s most educated workforce.

Over the past two decades, sustained efforts by the ACT Government, universities, research organisations, and the private sector have driven economic diversification and knowledge-intensive industry growth. This case study examines Canberra’s innovation evolution, exploring the development of its ecosystem and identifying key challenges and future opportunities.

Studying Canberra’s innovation ecosystem is important for several reasons in a broader innovation ecosystem context.

The ecosystem has evolved " bottom-up," demonstrating how well-considered policy interventions, infrastructure investments, and collaboration between government, academia, and industry can accelerate knowledge-intensive economic development. Canberra has transformed from a city with limited private sector innovation into one that has successfully nurtured globally competitive startups, cutting-edge research, and new industry sectors. Its journey offers valuable lessons for other regions looking to enhance their innovation capabilities.

Canberra’s experience also highlights the importance of effective institutional alignment in advancing innovation. Universities, research organisations, and incubators have been pivotal in driving technological advancements and commercialising intellectual property. ANU, UNSW Canberra, and CSIRO have produced high-impact spinoffs, attracted venture capital, and positioned the city as a leader in emerging fields such as quantum computing, cybersecurity, and sustainable technologies.

Canberra’s case illustrates the role of small but targeted funding initiatives in supporting early-stage ventures. Programs such as the Innovation Connect (ICON) grants, the Canberra Innovation Network (CBRIN), and ANU Connect Ventures have provided crucial financial and mentoring support, bridging the gap between research and commercial success. This underscores the importance of government-backed seed funding and venture capital availability in building a robust and sustainable startup ecosystem.

Canberra’s innovation journey is also significant within the broader Australian context. As the national economy transitions towards high-tech industries, Canberra is a model of how relatively smaller, knowledge-intensive cities can drive economic diversification. Its focus on defence, space, quantum technologies, and digital health aligns with national priorities, demonstrating how regional innovation hubs can contribute to national economic strategies.

The case study is particularly relevant as it examines ongoing challenges. Despite its achievements, Canberra still faces barriers such as growth-stage capital shortages, talent retention issues, and the need for industry diversification beyond its strong defence and cybersecurity sectors. Addressing these challenges requires strategic policy adjustments, stronger links to international investment, and continued institutional collaboration.

Laying the Foundations: 2001-2008

The early 2000s marked the first significant efforts to nurture innovation in Canberra. Epicorp, a business incubator established with Commonwealth support, played a foundational role by investing in ventures such as Cohda Wireless, Windlab, and Locata.

While Epicorp has ceased operations, its legacy persists through later initiatives such as Lighthouse Innovations and Activate Capital.

National ICT Australia (NICTA), launched in 2002 as a Centre of Excellence in ICT research, significantly contributed to the innovation landscape. It cultivated expertise in artificial intelligence, computer vision, and software systems, strengthening industry-academia linkages. The organisation later merged into CSIRO’s Data61, sustaining Canberra’s leadership in digital research.

Funding mechanisms also emerged, notably the ACT Knowledge Fund (2003-2006) and the Canberra Business Development Fund (2005). These initiatives catalysed early-stage commercialisation, supporting startups like Seeing Machines and Liquid Instruments. The establishment of ANU Connect Ventures in 2005, backed by MTAA Super and the ACT Government, further bolstered seed funding, accelerating investment in research-driven startups.

By the late 2000s, Canberra had established core components of an innovation ecosystem: incubators, research funding, and growing investor interest.

Institutional Development and Growth: 2008-2018

During this period, universities became proactive in commercialising their research. ANU and the University of Canberra (UC) launched InnovationACT, a student-led startup competition to encourage and build capability in entrepreneurship. UNSW Canberra deepened its focus on defence, space, and cybersecurity, while CIT adapted its vocational offerings to the needs of a knowledge-based economy.

Lighthouse Innovations, established in 2008 as a public-private incubator, provided tailored support to tech startups. The ACT Government also launched the Innovation Connect (ICON) program, offering competitive grants for proof-of-concept ventures. ICON has since remained a crucial element of Canberra’s early-stage innovation landscape.

A defining moment came in 2014 with the creation of the Canberra Innovation Network (CBRIN). Established through a partnership between the ACT Government, ANU, UC, UNSW Canberra, CSIRO, and industry players, CBRIN took a leadership role in innovation efforts. It cultivated collaboration, supported startups through the Griffin Accelerator, and facilitated knowledge-sharing via networking events such as First Wednesday Connect.

During this period, Canberra emerged as a leader in defence and cybersecurity, with UNSW Canberra and ANU playing pivotal roles. High-growth startups such as Instaclustr, Reposit Power, and Lithicon demonstrated the ecosystem’s capacity to produce globally competitive companies. Instaclustr’s acquisition by NetApp in 2022 for USD500 million highlighted Canberra’s potential as a deep-tech hub.

Beyond STEM, cultural and creative industries also flourished. Screen Canberra and digital media and gaming initiatives enriched Canberra’s innovation ecosystem, demonstrating a broadening of innovation beyond traditional technology fields.

Expansion and Maturation: 2018-Present

Since 2018, Canberra’s innovation ecosystem has matured, with institutions expanding their industry linkages. ANU launched the Software Innovation Institute in 2020, while UC established the Open Source Institute with foundational support from Instaclustr. The UC Health Innovation Hub emerged as a key player in digital health and aged care research.

UNSW Canberra’s city precinct is becoming a co-location hub for defence and cybersecurity startups, reinforcing Canberra’s role in national security innovation. The university’s Launch on Northbourne facility has further supported deep-tech entrepreneurs working on dual-use technologies.

Spinoffs from ANU, UC, CSIRO, and UNSW Canberra have proliferated, including Quantum Brilliance, Samsara, Nomad Atomics, Syenta, SkyKraft, and Vai Photonics. These ventures have collectively raised hundreds of millions of dollars, employing high-skilled professionals and reinforcing Canberra’s reputation in quantum research, where ANU leads nationally.

Sustainability innovation has also flourished. Canberra achieved its 100% renewable energy target in 2020, attracting investment in hydrogen energy, circular economy solutions, and low-emission transport. Smart city initiatives integrating AI and IoT into urban planning further underscore Canberra’s role as a forward-thinking city.

International engagement has grown, with the ACT Government’s International Engagement Strategy (2020-2025) attracting foreign investment into technology and research sectors. Collaboration with regional innovation hubs across southern NSW has strengthened Canberra’s broader economic footprint.

Challenges and Future Directions

Despite its success, Canberra faces significant challenges:

Growth-stage capital: Mid-tier startups struggle to secure investment to scale operations. While the upcoming Activate Capital venture fund will provide early-stage funding, Canberra requires additional growth-stage capital sources.
Talent retention: Canberra’s small population limits workforce scalability, necessitating strategies to attract and retain skilled professionals.
Industry diversification: While defence, cybersecurity, and space remain strengths, expanding into medtech, advanced manufacturing, and creative industries is critical for economic resilience.
Policy coordination: Stronger alignment between ACT and federal innovation strategies would optimise funding opportunities and cross-sector collaboration.

A major opportunity lies in the knowledge corridor linking UC, the AIS, the future North Canberra Hospital, CSIRO, ANU, and UNSW’s new city campus. This corridor, valued at billions of dollars in innovation infrastructure, has the potential to become a world-class innovation district. However, its development requires clear governance and strategic planning.

Conclusion

Canberra’s transformation into an innovation hub underscores the power of sustained investment, institutional collaboration, and policy foresight. Its experience offers key lessons for other cities seeking to build resilient innovation ecosystems:

Leverage research institutions: Universities and research organisations serve as vital catalysts for commercialisation.
Encourage public-private collaboration: Canberra’s model demonstrates the benefits of joint government, industry, and academic engagement.
Specialise in strategic sectors: Canberra’s focus on defence, cybersecurity, quantum, and sustainability has created areas of competitive advantage.
Secure global investment: Canberra’s engagement in international partnerships has enhanced its innovation ecosystem’s credibility.
Support early-stage entrepreneurship: Targeted funding programs have been instrumental in nurturing high-growth startups.
Integrate smart city initiatives: Urban innovation enhances both economic and environmental sustainability.

With ongoing investment in digital technology, sustainability, and diversified industry growth, Canberra is well-positioned to maintain its status as a national innovation leader. Its experience provides a roadmap for other regions seeking to drive innovation-led economic development. The next phase of Canberra’s journey will depend on strategic leadership, coordinated policy efforts, and the capacity to scale its innovation infrastructure for long-term success.

This case study is a summary from a more detailed chronology, available at:

In preparing this case study, the comments and contributions of Petr Adamek, Glen Hasset, Luke Garner, and Victor Pantano are greatly appreciated.