New research from professional accounting organisation CPA Australia reveals the lack of representation in the small-business sector of business owners under 40 years old and classified as either Millennials or Gen Z.
CPA Australia’s latest Asia-Pacific Small Business Survey shows that while Australia has the highest percentage of small-business owners aged 50 and above in the Asia-Pacific region, the country only ranked ninth out of 11 when it comes to the proportion of small-business owners under 40. Furthermore, Australia is ranked among the worst in Asia-Pacific for attracting young people into small-business ownership.
“Where have all the young business owners gone? They’re ‘Generation MIA’ when it comes to small businesses,” CPA Australia Senior Manager Business and Investment Policy, Gavan Ord, remarked on the research findings, adding that the organisation has urged the Federal Government to hold a public inquiry to find out what is stopping young people from set up their own businesses.
“The survey results show that young business owners and founders are a necessary ingredient for Australia’s economic future, our digital capabilities and future innovations,” Ord said. “We need Australians of all ages running and owning small businesses. Diversity brings huge benefits to the economy. The absence of young people has long-term implications.”
The failure to attract young people to entrepreneurship has been attributed to the low level of digital capability of Australian small businesses compared to their Asia-Pacific peers and are among the least likely to innovate in 2023.
In fact, 30.4 per cent of small businesses in Australia are not using social media, compared to the Asia-Pacific average of 15.4 per cent. In addition, only 18.8 per cent of Australian small businesses sought advice from technology consultants last year. And the businesses that did invest in technology have focused more on updating their website and computer hardware rather than adopting new and innovative options such as artificial intelligence.
The lack of digital know-how within Australian small businesses extends into cybersecurity, with only a quarter considering cyberattacks to be a possibility in 2023, compared to an Asia-Pacific average of almost half.
“Australia’s small businesses are unlikely to innovate,” Ord lamented. “Only 14 per cent are intending to introduce a unique product or service to the market in 2023. This is the worst result in Asia-Pacific. A lack of innovation is a drag on economic growth and productivity that we will feel for years to come.
“Encouraging new talent to launch small businesses can boost long-term innovation,” he added. “The government needs to ensure running a small business is an attractive option for young people who can bring their digital skills to the sector.”
On a more positive note, the report notes that Australian businesses had their best year in five years in 2022, with 47.6 per cent of small businesses growing. This year is likely to be even better for Australia with more than 55 per cent of businesses expecting growth despite current and future economic challenges.
“It’s understandable that some young Australians are questioning whether business ownership is worth the stress and commitment. The pandemic, rising cost of living, high property prices and global uncertainty are adding to their doubts,” Ord said. We want young people to seize the opportunity to control their own destiny. This is a huge chance to inspire and encourage young people into the business community as Australia continues to recover. We want the government and current business owners to explore how to attract young minds into this critical sector.”
