GEM Australia 2010 National Summary

MAIN CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITY

While 26.6% (N=532) of the population reported some kind of entrepreneurial activity, only 6.4% are involved in early-stage entrepreneurial activity (nascent firm or young firm or both). Of these 6.6% are males and 6.3% females. While 9.1% of the entrepreneurs cannot define a precise reason why they started a new venture, 18.4% did it out of necessity and 72.5% identified it as an opportunity.

In terms of growth aspirations, 16% anticipates 10 or more jobs 5 years after the business has started, while 84% believe it will be less than that. If we look at market size 64.2% do not anticipate any change, 31.8% expect some market expansion, while the remaining 4.1% anticipate a significant increase.

3.8% of the population are owners in start-up efforts and 2.6% own-manage a business that is up to 42 months old. 9% of the population anticipate they will start a new business over the next 3 years.

ENTREPRENEURIAL ACTIVITY & THE ECONOMIC CRISIS

The Global Financial Crisis (GFC) started in 2007, had its peak in the second half of 2008 and is still ongoing. 7.9% of established Australian businesses reported that the GFC positively impacted their activities by providing more opportunities, 41.9% stated no change, and 50.2% were negatively affected. Among early-stage Australian entrepreneurs, only 14.6% perceived a positive impact out of the GFC, while 43.4% saw it as an event that restricted business opportunities.

Out of 42 individuals (2.1%) who decided to exit a business, 31.6% reported the activity not being profitable as the main reason and 6.2% having problems in getting finance, both reasons arguably linked to the GFC. The rest suggested: opportunity to sell (11.7%), another job or business opportunity lined up (9.1%), having planned the exit in advance (6.8%), retirement (14.1%), and personal reasons (20.4%).

The general feeling that the GFC is still not over is validated by 58.9% of established Australian businesses considering the start of a new business today to be even more difficult than it was a year ago (May-Jun 2009), while 32% consider it to be the same. People involved in early-stage entrepreneurial activities are just slightly more positive in their assessment with 36.8% reporting the feeling that starting a new business now would be more difficult than a year ago, and 46.8% consider it to be about the same.

While the GFC is not over yet, people are beginning to see the light at the end of the tunnel as confirmed by significant changes in growth aspirations, especially for early-stage entrepreneurs: 38.5% increased them, 34.7% kept them the same, and 26.8% lowered their growth ambitions. Established businesses also show optimism although they appear to be more cautious with 35.6% lowering growth ambitions compared to a year ago, 37.8% maintaining them the same, and 26.6% increasing them.

GEM IN ACTION

Australia did not participate in GEM in recent (2007-9) years.

List of Australian References mentioning GEM

1)   Parliament of Australia – House of Representatives: Inquiry into pathways to technological innovation http://www.aph.gov.au/house/committee/scin/pathways/report/prelims.htm

2)   Austrade: Innovation means more than better mouse traps http://www.austrade.gov.au/Innovation-means-more-than-better-mouse-traps/default.aspx

3)   Australian Government – Equal Opportunity for Women in the Workplace Agency: 2006 Census of Women in Leadership http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2006_Australian_Women_In_Leadership_Census/Secure%20site.asp

4)   Victorian Government: Strategic Audit of Victorian Industry http://www.business.vic.gov.au/busvicwr/_assets/main/lib60019/savi_overview.pdf

5)   Department of Education, Training and Youth Affairs: National Youth Entrepreneurship Attitude Survey http://www.innovation.gov.au/Documents/National%20Youth%20Entrepreneurship%20Attitude%20Survey20041122160212.pdf

6)   AusAID: Annual program performance report: Pacific regional program 2008-09 http://www.ausaid.gov.au/publications/pdf/appr-0809-pacific-regional.pdf

7)   Department of Broadband, Communications and the Digital Economy: An Overview of the Australian ICT Industry and Innovation Base http://www.dbcde.gov.au/__data/assets/pdf_file/0012/10353/An_Overview_of_the_Australian_ICT_Industry.pdf

8)   Foundation for Young Australians http://www.fya.org.au/wp-content/uploads/2009/05/seg_final_small1.pdf

9)   The Australian Treasury – Macroeconomic Policy Division: Measuring entrepreneurship http://www.treasury.gov.au/documents/1352/PDF/02_Entrepreneurship.pdf

10)           The Australian Treasury: Economic Roundup Summer 2008 http://www.treasury.gov.au/documents/1352/PDF/combined.pdf

11)           Australian Government – Productivity Commission: Public Support for Science and Innovation http://www.pc.gov.au/__data/assets/pdf_file/0016/37123/science.pdf

12)           Federal Industrial Council of the Retail Motor Industry http://www.workplace.gov.au/NR/rdonlyres/96E4068A-623A-42A6-B27C-80E4E69E2FD3/0/FederalIndustryCounciloftheRetailMotorIndustry.pdf

 

 

List of 2009/10 GEM-related Scholarly Articles by Australian Authors

  1. Luke, Belinda and Verreynne, Martie-Louise and Kearins Kate (2010) Innovative and entrepreneurial activity in the public sector: The changing face of public sector institutions. Public Sector Innovation. 12, pp. 138-153.
  2. Craig, Justin and Moores, Ken (2010) Championing Family Business Issues to Influence Public Policy: Evidence From Australia. Family Business Review. 23, pp.170-180.