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An extra 3.5 million start-ups are expected to add 1 million jobs over next decade, survey reveals.
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Pandemic fallout fuelling small-business boom
27 April 2022
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Entrepreneurial activity will drive a post-pandemic surge in small businesses that will boost the economy by $370 billion over next decade and add 1 million jobs.
The boom, according to a survey, is a direct result of a COVID rethink and is expected to generate 3.5 million start-ups and employ 6 per cent of the labour force by 2031.
The research, by software company Xero in conjunction with Accenture, shows that post-pandemic Australia is about to enjoy “favourable conditions” for businesses.
“[The] 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,” said Xero managing director Joseph Lyons.
“Conditions are favourable for Aussies seeking to strike out on their own. We’ll see this play out with an expected 3.5 million small business registrations contributing a total of $370 billion to the Australian economy over the next 10 years.”
Despite the economic crisis brought on by the response to COVID, the research showed small-business registrations are at unprecedented levels, growing 34 per cent from 2019 to 2021, to more than 300,000.
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The phenomenon is the reverse of what occurred following previous periods of economic uncertainty, such as the 2007-09 global financial crisis.
It said a range of factors changed the mood around start-ups:
- Job uncertainty: reduced hours, redundancies, limited opportunities for pay rises
- Great resignation: Australians re-evaluated their job satisfaction and sought greater enrichment, control, and flexibility in their work.
- Digitalisation: has spurred decentralised workplaces and heightened regional opportunities
- Fresh opportunities: the rise of the gig economy, digital ways of working and favourable business lending have created the conditions for more budding entrepreneurs to take the plunge.
“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,” said Mr Lyons.
“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.”
The report also showed that the next entrepreneurial generation is younger, more tech-savvy and more diverse.
A typical Australian small-business owner is evolving away from the archetype of a 55-year-old male, and more likely to be under 35.
Many (37 per cent) are born overseas and more than one-third are women, with a 40 per cent increase in small businesses owned by women since 2001.
“We’re welcoming greater numbers of young people, women, and those of different cultural backgrounds to the fold, who will bring with them the knowledge and skills to create innovative and lasting companies,” Mr Lyons said.
The survey took place in July 2021 among 1,212 decision-makers in small businesses with fewer than 50 employees.
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