Revitalising the Australian Economy: Navigating the Headwinds

Monday, November, 11, 2019

Revitalising the Australian Economy: Navigating the Headwinds

November, Monday, 11, 2019

Navigating the Headwinds of the Australian Economy

Small business continues to be the engine room of economic growth. The latest government statistics indicate that of the 2.24 million businesses in Australia, there were 2.18 million (97.3%) micro and small businesses (those with less than 20 employees). Of these, there were 1.4 million (64.2%) micro businesses that did not employ any staff. Small business contributes 30% of GDP, employs 44% of all workers and generates 40% of new jobs. The annual turnover for 60% of these small businesses is less than AUD$200,000.

However, if small business is to prosper, some things need to change. Innovation processes are less common in small businesses, with 60% engaged in innovative activity compared to 67% for medium sized businesses and 80% for large businesses. Small businesses also report slower rates of productivity improvements compared to large firms (28% compared to 36%). Whilst small businesses represent 44% of all businesses that export goods, they only account for 0.5% of exports by value. Despite increases in the number of small businesses that are ‘born global’, significant scope exists for them to become more dynamic, innovative and efficient.

Recent research by the OECD and others indicates that small business can play an important role in lifting national productivity growth and, more importantly, national living standards through a variety of ways, including improved diffusion of knowledge, products, processes and technologies across businesses.

However, significant challenges have emerged. (Read more…).

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