05 Jun Small businesses in the Australian economy
Data recently released by The Australian Bureau of Statistics suggests that small businesses in Australia are multiplying more than medium and large sized businesses. For anyone thinking about a business endeavour in the near future, this information could be extremely insightful and possibly assist a decision.
The ABS reported that the number of small businesses grew by at least 5% between 2014 – 2016 overall. Compare this to a growth of 4% in the large scale business category and a loss of -1% in the number of medium scale businesses during the same period. Although surprising, this statistic isn’t nearly as impressive as the growth rate of small businesses in certain pockets of Australia that are not exactly known as business districts.
Areas such as Victoria’s Cranbourne East, a small suburb about 45 minutes from Melbourne’s CBD have had a boom of small businesses in their area, increasing 65% in 2 years. Other areas across the country are experiencing similar rates growth for small businesses and tall of them seem to be suburban towns one wouldn’t expect.
The chart below shows the industries of growth according to the ABS, which could provide some explanation as to why these micro businesses are flourishing. Education, rental and construction businesses are among the biggest growth industries pushing growth through the community. Moreover, political factors may be contributing to a decline in medium scale businesses with bureaucracy taking a hold of medium sized business’ resources as they wade through red tape. Large scale organisations may also be to blame for acquiring medium sized businesses in their industry and growing as a result, ultimately polarising the large and small ends of the business spectrum.
These are only speculations, but the fact remains that micro and small businesses have the advantage right now which is good news for entrepreneurs, start up prospects and the Australian economy alike. Growth in these sectors has seen at least 30,000 jobs created in the past two years, with the number likely to actually be over 100,000.