Entrepreneurial Aussies to support small business boom with $370 billion boost over next decade
Landmark research from Xero reveals one million new jobs will be supported by small businesses over the next 10 years
Melbourne — 26 April, 2022 —Xero, the global small business platform, today released key research into the current state of Australia’s small business sector, and where opportunity lies for these businesses and Australia’s economy, over the coming decade.
The report, ‘Where opportunity lies: Australia's new small business boom’, conducted in partnership with Accenture, shows that Australia is in a small business boom that is set to continue, with a further estimated 3.5 million small businesses being created over the next 10 years.
Forecast impact of new small businesses by 2031:
- $370 billion over 10 years in value will be added to the Australian economy
- One million new jobs will be supported
- Six per cent of the nationwide labour market will be employed by the new businesses
- Contributing three per cent towards the total economy
Joseph Lyons, Managing Director Australia and Asia, Xero, said: “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 with an expected 3.5 million small business registrations contributing a total of $370 billion to the Australian economy over the next 10 years,” Lyons said.
COVID-19 has kick-started the small business boom
Small businesses are the heartbeat of the Australian economy, accounting for 99.8 per cent of total businesses, 66 per cent of employment, and 55 per cent of value added prior to the pandemic.
Xero’s report has revealed new small business registrations are at unprecedented levels, growing 34 per cent from 225,000 in 2019 to over 300,000 in 2021. 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.
External factors are likely to have contributed to the surge in new business registrations:
- 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: increased use of technology and digitalisation has decentralised many workplaces creating opportunities for business owners to work in regional areas
- New 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 newest generation of small business owners are younger, tech savvy, more diverse “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.
Xero’s report also shares insight into how the profile of the typical Australian small business owner is evolving – uncovering a shift away from the archetypal business owner, who is generally male, aged 55 or above, and born in Australia. Today’s changemakers are younger, tech savvy, more culturally diverse, and increasingly likely to be women.
The changing face of entrepreneurship in Australia:
- 45 per cent of entrepreneurs surveyed are aged under 35
- 37 per cent of entrepreneurs surveyed were born overseas
- 36 per cent of entrepreneurs are women
- 40 per cent increase in small businesses owned by women since 2001
- More digitally savvy – 72 per cent of recently founded small businesses surveyed say technology plays an essential or important role
NB: These figures are from Accenture’s analysis of the ABS Characteristics of Employment Data, and Xero survey data.
2022 Australian Roadshow
With more people embracing tech to bring their ideas to life, the profile of Australia’s small business owners will continue to shift. 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,” concluded Lyons.
In conjunction with the report, Xero has commenced its 2022 Australia Roadshow. The event series brings together the accounting and bookkeeping community to discuss new ways of growing their business and supporting Australian small businesses. Find out more by visiting this link.
Xero Australia | Sophie McCullen | +61 435 913 863 | firstname.lastname@example.org
Xero is a cloud-based accounting software platform for small businesses with over 3 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 1,000 third-party apps and 300 plus connections to banks and other financial partners. For three consecutive years (2020-2022), Xero has been included in the Bloomberg Gender-Equality Index. In 2021, Xero was included in the Dow Jones Sustainability Index (DJSI), powered by the S&P Global Corporate Sustainability Assessment and in 2020, Xero was recognised by IDC MarketScape as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders.
About the ‘Where opportunity lies: Australia's new small business boom’ report
The report was commissioned by Xero to highlight the changing face of the Australian small business owner and document the rising importance of small businesses to the Australian economy.
Xero commissioned an unbranded, nationally representative study of small businesses in Australia (n = 1,212). Data collection was conducted between 12-26 July 2021 and study respondents are all small business decision makers for businesses with less than 50 employees. This data was collected in July 2021 by independent behavioural consultancy Decision Design via an anonymous and unbranded online questionnaire among a representative sample of n = 1,212 businesses across Australia.
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