Recent research from small business platform Xero revealed the extent of the contributions Australia’s entrepreneurs are providing to the country’s economy.
In its report Where opportunity lies: Australia’s new small business boom, conducted in partnership with Accenture, Xero revealed that Australia is in the midst of what is considered to be a small business boom as it is projected that around 3.5 million small businesses will be created over the next 10 years, in addition to the small businesses already in existence.
Xero also projects that these new businesses will generate a total of $370 billion for the Australian economy over the next 10 years, giving the economy a much-needed boost as it recovers from the COVID-19 pandemic which has left it severely affected.
Joseph Lyons, Managing Director Australia and Asia, Xero, commented, “Xero’s landmark report arrives at a hopeful chapter in our nation’s pandemic journey: one that sees a surge in small business creation as Australians continue to adapt to uncertainty. Conditions are favourable for Aussies seeking to strike out on their own. We’ll see this play out.”
Xero found that new small business registrations are at unprecedented levels, growing 34 per cent from 225,000 in 2019 to over 300,000 in 2021. It noted that this rapid growth in response to an economic crisis is unique, and the reverse of what occurred following previous periods of economic uncertainty such as the 2007-09 global financial crisis. It cited some possible reasons for such a unique response, including:
- Job uncertainty
- Thje “Great Resignation” as many reevaluated their job satisfaction and sought greater enrichment, control, and flexibility in their work
- New opportunities such as the rise of the gig economy, digital ways of working, and favourable business lending
“The pandemic allowed many Australians to re-evaluate their careers and take advantage of a decentralised and digital workplace to start their own small businesses. More than ever, entrepreneurs are charting a new path in search of meaningful careers – from those who experienced redundancies to the burned out workers ditching the corporate grind, the next generation of resilient changemakers are leading our economy forward – and they’re not looking back,” added Lyons.
The report also noted the demographics of the rising entrepreneurial class in Australia. In particular, 45 per cent of entrepreneurs surveyed are aged under 35, as well as 37 per cent were born overseas, 36 per cent are women, a 40 per cent increase in small businesses owned by women since 2001. Meanwhile, 72 per cent of recently founded small businesses surveyed say technology plays an essential or important role.
“With more people embracing tech to bring their ideas to life, the profile of Australia’s small business owners will continue to shif. We’re welcoming greater numbers of young people, women, and those of diferent cultural backgrounds to the fold, who will bring with them the knowledge and skills to create innovative and lasting companies,” concluded Lyons.