In recent years, Australia has witnessed a remarkable surge in the number of microbusinesses, playing a pivotal role in transforming the economic landscape of the nation.
These small-scale ventures, typically consisting of fewer than five employees, have thrived due to various factors, including improved home internet connectivity, technological advancements, evolving consumer behaviour, favourable regulatory environment and the glorification of an entrepreneurial spirit.
According to the Australian Banking Association, 98% of 2.6 million businesses in Australia are SMEs, and micro businesses are the largest proportion of all Australian businesses, with 1.55 million (60%) of businesses employing no staff. A further 955,000 businesses (37%) employed 1-19 staff.
This article delves into the rise of microbusinesses in Australia, exploring the factors that facilitated their growth and highlighting the significant benefits they bring to the Australian economy.
Improved internet connectivity
One of the key enablers for the rise of microbusinesses in Australia has been the proliferation of improved internet connectivity, particularly through the implementation of the National Broadband Network (NBN) with its focus on fibre to the premises (FTTP) technology.
“With high-speed, reliable internet connections becoming more accessible and affordable, it’s never been easier to start a business, and the rollout is getting faster,” said David Michaels, head of sales and marketing at national broadband provider Swoop.
“Our new Home Ultrafast plan leverages the NBN’s FTTP technology to offer incredibly fast and reliable internet connectivity to homes and businesses. We’re thrilled that NBN is rolling out FTTP across the country and we’ll be able to offer our NBN 1000 plan to more customers this year and to 90% of Australia by 2025.”
This connectivity revolution has eliminated geographical barriers, allowing entrepreneurs to tap into national and global markets with ease.
Rapid advancements in technology have played a vital role in facilitating the growth of microbusinesses. Cloud computing, mobile applications and e-commerce platforms have provided affordable and scalable tools for these ventures to streamline their operations, market their products and services, and reach a wider customer base.
The advent of social media platforms has also been instrumental in enabling microbusinesses to build online communities, engage with customers directly and leverage targeted advertising, all of which were previously reserved for larger enterprises.
And, of course, developments in artificial intelligence have made starting and running small businesses easier and more cost-effective.
One way that Ian Aldridge of Progressive Legal sees this happening is through access to services such as legal support.
“We believe 75% of small businesses in Australia don’t have a lawyer that understands their business, that they can go to any time for advice – or have never had legal advice,” he said.
“AI is going to reduce the barrier to entry for that 75% who don’t have lawyers because now they can go online, not have that intimidation, they get AI giving them the contract or whatever at a much lower cost, and then they can use that or seek legal advice on it.”
In fact, this swiftly changing technological landscape meant that the number of microbusinesses in Australia grew 10% in a year, from 1.41 million in June 2021 to 1.55 million in June 2022, according to The Australian Banking Association.
Evolving consumer behaviour
Changing consumer preferences and behaviours have created fertile ground for microbusinesses to thrive.
Modern consumers increasingly value personalised, niche products and services that cater to their unique needs. Microbusinesses, with their agility and ability to pivot quickly, are well-positioned to respond to these demands.
By offering tailored solutions and personalised experiences, these ventures can differentiate themselves from larger competitors and foster a loyal customer base.
Moreover, the increasing emphasis on supporting local businesses has further boosted the growth of microbusinesses within communities.
Favourable regulatory environment
The Australian government has recognised the crucial role played by microbusinesses in driving economic growth and has implemented policies and initiatives to support their establishment and growth.
Measures such as simplified taxation processes, reduced red tape and streamlined registration procedures have encouraged aspiring entrepreneurs to take the leap into self-employment. Additionally, targeted grants, subsidies, and access to funding have provided financial support to microbusinesses, enabling them to invest in innovation, technology, and expansion.
For example, as part of the 2023-24 May Budget, the Australian Government announced a new $392.4 million Industry Growth Program for small and medium enterprises (SMEs) and startups.
The rise of microbusinesses in Australia is a testament to the country’s entrepreneurial spirit. The desire for independence, flexibility and the pursuit of passion projects has driven individuals to establish their own ventures.
The advent of the gig economy, with its emphasis on flexible work arrangements and self-employment, has also played a significant role in encouraging the growth of microbusinesses. As more people seek autonomy and control over their professional lives, microbusinesses offer an attractive avenue to pursue their entrepreneurial aspirations.
Benefits to the Australian economy
The rise of microbusinesses has had a profound impact on the Australian economy, contributing to its overall growth and resilience. Here are some key benefits:
Microbusinesses have emerged as crucial job creators, especially during times of economic uncertainty. By providing increased employment opportunities, they contribute to reducing unemployment rates and improving local communities’ economic well-being.
Innovation and competition
Microbusinesses foster innovation by bringing fresh ideas, creativity and entrepreneurial thinking to the market. Their agility and ability to experiment with new concepts often lead to disruptive innovations that challenge established industries and drive healthy competition.
Microbusinesses have the potential to revitalise regional areas by providing employment opportunities and encouraging local economic growth. They play a crucial role in diversifying regional economies and reducing reliance on major urban centres.
Microbusinesses, leveraging technology and automation, often have efficient operational models. By adopting digital tools and streamlined processes, they can achieve higher levels of productivity, contributing to overall economic efficiency and growth.
The rise of microbusinesses in Australia has been facilitated by various factors and these small-scale ventures have become a significant force driving economic growth and innovation in the country.
By creating jobs, fostering competition, supporting regional development, and enhancing productivity, microbusinesses are making a substantial contribution to the Australian economy.
As their influence continues to expand, it is vital for policymakers and stakeholders to support their growth and provide an enabling environment for their sustainable development.