Perth has rocketed to the top spot with an overall score of 68.35/100, thanks to its strong talent pool and thriving business environment.
The Australian startup landscape has undergone a seismic shift, with traditional powerhouses losing ground to emerging regional centres and unexpected contenders claiming top positions.
Perth’s meteoric rise from 20th place to first demonstrates how quickly business dynamics can change in today’s digital economy.
Perth has rocketed to the top spot with an overall score of 68.35/100, thanks to its strong talent pool, thriving business environment and impressive internet speeds. It’s a huge jump from last year, when Perth ranked 20th. The Western Australian capital’s transformation reflects broader changes in how businesses evaluate location decisions, with factors beyond traditional metrics now driving success.
Brisbane also climbed the ranks, moving from eighth to second place, with a major boost in digital infrastructure playing a major role, scoring 66.72/100. Adelaide also made its way into the top three from 13th place last year, with a total score of 66.25/100. The pattern emerging across Australia shows that cities investing in digital infrastructure and maintaining competitive costs are reaping rewards as businesses prioritize operational efficiency over prestige locations.
Regional centers challenge traditional strongholds
The rankings reveal a fundamental shift in Australia’s business geography. Canberra and Queanbeyan had the most dramatic improvement of all, jumping 31 spots to land in fifth place with a score of 63.58/100, driven by the city’s skilled workforce and connectivity. This represents one of the most significant repositioning stories in the data, highlighting how government investment in digital infrastructure and education can rapidly transform a region’s business appeal.
Meanwhile, established leaders face new challenges. On the flip side, some 2024 frontrunners have slipped. Geelong, last year’s number one, dropped out of the top 10 entirely, while Ballarat fell from second to eighth. These changes highlight how quickly the startup landscape can shift, especially as factors like digital capability, affordability and access to talent continue to shape where businesses are most likely to succeed.
The data reveals stark contrasts between cities. When it comes to the specific factors analysed, no city leads across all factors. Canberra–Queanbeyan ranks highest for median income ($1,613.42) and education (47.9%), showing strong earning potential. Sydney tops in young workers (679,700), business density (592,364) and population health (65.9%), but also has the highest mortgage costs ($6,038.82) and transport expenses ($564.18). Darwin has the highest labour force participation (75.4%) but ranks lowest for internet latency (62.0 ms) and long term survival rate (48.9%).
The new economics of business location
These dramatic rankings shifts reflect changing business priorities in post-pandemic Australia. Digital infrastructure has emerged as a critical factor, with cities offering high-speed internet and low latency gaining significant advantages. Cost considerations have also intensified, as businesses seek sustainable growth models that don’t require premium urban rents.
The talent pool dynamic has evolved beyond traditional assumptions. While Sydney maintains its advantage in absolute numbers of young workers, smaller cities are demonstrating they can offer quality talent with better retention rates and lower operational costs. Educational attainment levels vary dramatically across regions, with some smaller centres showing surprising strength in skilled workforce development.
Sam Allert, Reckon CEO, provides context for these trends: “Starting a small business in Australia isn’t easy, especially with the rising cost of living. But small businesses really are the engine room of our economy, and we’re seeing growth pop up in places you might not expect. When we looked at things like talent, infrastructure and affordability, it became clear that opportunity is no longer confined to the capital cities.”
Strategic implications for business planning
The rankings data suggests that businesses need more sophisticated location strategies than traditional “follow the capital cities” approaches. Cities like Toowoomba, ranking sixth, and Mackay at seventh, demonstrate that regional centres with the right infrastructure mix can compete effectively with major metropolitan areas.
The survival rate data provides additional insights into long-term business success factors. Tasmania leads in both short-term (79.4%) and long-term (54.6%) business survival rates, suggesting that some markets offer more sustainable operating environments despite lower absolute scores in other categories.
Infrastructure quality varies significantly across regions. Melbourne leads in download speeds (124.4 Mbps), while Mount Gambier lags at 49.6 Mbps. These connectivity gaps directly impact business operations, particularly for technology-enabled companies that form the backbone of modern startup ecosystems.
Allert emphasizes the strategic implications: “For business owners, flexibility is everything. It’s important to always keep an eye on emerging markets with the right mix of talent, affordability and infrastructure. A lot of the time, the best opportunities are in places flying under the radar. Invest in digital, stay close to your local community and don’t be afraid to think beyond the big cities. That’s where you’ll often find the real potential.”
The 2025 rankings represent more than statistical reshuffling—they signal a fundamental rebalancing of Australia’s business geography. As digital capabilities level the playing field and cost pressures intensify, the cities that can offer the right combination of talent, infrastructure, and affordability are positioning themselves as the startup centres of the future.
For entrepreneurs and business planners, the message is clear: opportunity increasingly lies beyond traditional assumptions, and the cities investing in the right combination of digital infrastructure, talent development, and business-friendly environments are creating tomorrow’s success stories today.
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