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Labour and rent costs give Adelaide a competitive edge

Investing

Affordable office space, a good supply of relatively inexpensive labour and generous tax breaks are giving Adelaide a competitive edge over its interstate rivals as a desirable place to establish an Australian business.

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Adelaide's economic advantages

Adelaide – ranked the most cost competitive city in Australia in KPMG’s 2016 biennial Competitive Alternatives Report – has private sector labour costs 10 per cent below the Australian average.

Its 28 co-working spaces – the highest number per capita in the Asia Pacific – and a wide range of office options has the city well placed to cater for startups and businesses with large and small footprints.

South Australia’s central location in Australia and the proximity of Adelaide Airport just six kilometres from the CBD makes the state the ideal gateway into Asia.

Adelaide app developer Virtual Ark services global customers including London-based interactive music platform BlueJay.

Virtual Ark CEO Martin Gauvin said the South Australian capital was ideally placed to become a leader in outsourced app development.

He said the quality of resources and the ability to work on products while areas of the world like Europe and the Americas were sleeping made Adelaide an attractive place for a global base.

Adelaide was “measurably cheaper than other Australian cities” and it was ready to service the “tens of thousands of projects” from the other side of the world, Gauvin said.

“The cost to develop an app anywhere in the world is about the same so the real difference is in terms of the time it takes and the quality of the outcome,” he said.

“Low cost countries like China, India, Russia or Vietnam don’t have the advantage they seem to because they tend to have an abundance of one skill specialists but we have cross-skilled people.”

MIK Health began in Adelaide last year as an offshoot of Sydney-based creative digital agency Made in Katana.

The company began building technology to assist the mental wellbeing of corporate employees and has since expanded into health platforms for professional athletes.

MIK Health Managing Director Ben Tripodi said access to cheaper rents and affordable labour were major factors in the decision to set up in Adelaide.

“I think our rent is about a quarter of the cost of a Sydney office and not only that, we are also close to medical institutions such as hospitals and universities to take advantage of the technologies we are starting to build in that health space,” he said.

Tripodi said access to university graduates and key decision makers such as politicians and CEOs was also much easier in Adelaide because of its size and spirit of collaboration.

“In Adelaide people are willing to introduce you to the key decision makers – just being able to access them is so much easier than it is in Sydney or Melbourne where there seem to be so many hurdles.”

Companies setting up in Adelaide can access support from Investment Attraction South Australia’s Landing Pad program, which offers professional support and advice, introductions to business networks and assistance securing office space.

The South Australian Government is also rolling out a four-year AU$670 million tax reform package. This includes the phasing out of payroll tax to make South Australia the lowest taxing state in Australia for business.

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