Small businesses in Australia have made an astounding economic impact, contributing over half a trillion dollars to the country’s economy, according to a report released by Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman.
The report, named Small Business Matters, highlights the remarkable growth rate of 15 per cent in the fiscal year 2021-2022, propelling the sector’s value to an impressive $506 billion, equivalent to one-third of Australia’s GDP.
The release of the report coincides with the global observance of World Micro, Small, and Medium-sized Enterprises Day on June 27. It delves into the crucial role played by small businesses, shedding light on their significant contributions across various sectors and industries.
Among the report’s key findings is the fact that Australia’s 2.5 million small businesses serve as the backbone of employment, offering job opportunities to an impressive 5.1 million individuals. Notably, these businesses employ 42 per cent of all apprentices and trainees in the country, almost double the proportion supported by larger corporations.
The report also emphasises the dominant presence of small businesses, which comprise approximately 98 per cent of all businesses in Australia. This underscores the vast scale and importance of small enterprises in the country’s economic landscape.
Bruce Billson, the author of the report, commended the small business community, stating, “Small businesses are the lifeblood of our communities, and we celebrate the vital contribution they make to Australia’s prosperity, wellbeing, and community.” He further acknowledged the diverse aspirations, backgrounds, and experiences of small business owners, all united by their entrepreneurial spirit and determination.
In terms of ownership demographics, statistical data reveals that the typical small business owner in Australia is a self-employed man around 50 years old, working full-time while earning less than the average wage for full-time employment.
However, the report also uncovers a significant shift in ownership dynamics, with female entrepreneurs rapidly gaining prominence. Women now account for 35 per cent of all small business owners, almost double the rate observed in the 1970s.
Interestingly, mature individuals are more inclined to become business owners rather than employees. Close to half of all small business owners are over the age of 50, indicating a growing trend in older entrepreneurship. The average age of small business owners has steadily risen over time. In contrast, individuals under the age of 30 make up only 8 per cent of small business owners, significantly lower than the peak of 17 per cent observed in the mid-1970s for this age group.
Bruce Billson highlights the need to understand the reasons behind younger Australians’ reduced attraction to small business ownership and emphasises the importance of nurturing the next generation of entrepreneurs.
The report further highlights that self-employment constitutes 60 per cent of small business ownership, encompassing approximately 1.55 million individuals. It underscores the appeal of self-employment, particularly for women and older individuals, due to the flexibility it offers.
Small business owners often shoulder additional responsibilities such as unpaid childcare and caregiving for individuals with disabilities, health conditions, or elderly family members. Billson rejects categorising these individuals as vulnerable gig economy workers, emphasising the diverse goals, motivations, and challenges that drive small business ownership.
While approximately 43 per cent of small businesses fail to generate profits, and 75 per cent of small business owners earn less than the average wage, they exhibit a strong commitment to their communities. Small business owners are more likely than the general population to volunteer for organisations or groups, showcasing their significant contributions beyond their entrepreneurial endeavours.
