Small and medium enterprises (SMEs) make up almost 98 per cent of all Australian companies and account for a third of the GDP.
They’re crucial to Australia’s economy, providing jobs for over 5 million people and employing 42 per cent of all apprentices and trainees. This is nearly double the amount supported by big business.
The SME ecosystem is not just our economic backbone – it’s also the launchpad for the nation’s herald of transformation: start-ups. In light of Small Business Month in October, let’s take a look at their important role in Australia’s prosperity.
Start-ups are trendsetters and changemakers
Australia is known for entrepreneurship, and our vibrant innovation hubs draw overseas attention and investment. Having an extremely high percentage of start-ups means that the Australian business ecosystem is laden with novelty, creativity and opportunities.
In my day-to-day conversations with founders, I can identify at least four ways start-ups are changing society for the better:
- Changemakers: Companies like Harrison.ai, who recently became the second Australian company to unveil a proprietary foundational AI model, are solving old problems with new solutions and even saving lives. Likewise, PERKii has written a new chapter for probiotic supplements with its cutting-edge ProGel technology, making probiotics 10,000 times stronger for gut health.
- Trendsetters: Innovative start-ups can trigger new trends and changes in user behaviour. For example, Canva has led to the democratisation of graphic design, Goodness Group Global is transforming the way customers are consuming sugar-free drinks and Xero has completely revolutionised the way businesses do their accounting.
- Equalisers: While there’s still a long way to go when it comes to closing the gender pay gap, an increasing number of founders are female. Women-owned businesses have increased 46 per cent in the 20 years to 2022, and women now represent 36 per cent of small business owners.
- Policy Influencers: Small businesses, despite their size, can still wield significant influence when it comes to policy, whether through industry associations and advocacy groups or direct intervention.
Start-ups are a mark of resilience and turnarounds
The creation of an idea is followed by the strenuous journey of executing the vision. It’s no secret that entrepreneurs work tirelessly, face continuous challenges and battle fears and weaknesses to navigate uncharted waters. The nature of start-ups not only enables resilient people, but also makes people more resilient, and their tenacity collectively strengthens society as they inspire many to dare to dream.
No storm is easy to weather, but the size and flexibility of start-ups mean they are nimbler and able to test and learn faster. When problems arise, start-ups can be the first to change strategy because they have less to lose and more freedom to pivot.
Start-ups ensure the world goes round
The ubiquitousness of start-ups encourages healthy competition, keeping wages up and prices down. It also serves as a form of accountability that brings out the best of founders.
Take SXSW’s The Pitch event for example – the dedicated space is a ground for inspiration and exchange of ideas, and where iron sharpens iron. Creativity is stimulated when many diverse ideas come together, and oftentimes a novel approach is the solution to a problem many have been stuck on for a while.
With artificial intelligence as a superpower, I foresee that the next decade of innovation will be the most transformative the world has ever witnessed, with start-ups right in the centre solving the world’s most challenging problems and building the businesses of the future. This diversity will encourage a fusion of notions, bringing forth unique perspectives that give birth to new inventions.
Whether it’s inspiring the world or transforming society, our small but mighty start-ups are more than just the lifeblood of Australia’s economy – they are our future.
By Steve Maarbani, CEO VentureCrowd
This article was first published by Inside Small Business