Harnessing the power of Australian entrepreneurs is integral to the growth and diversity needed to ensure the country’s economic sustainability, writes Tony Johnson.
Both locally and globally, entrepreneurial businesses are more important than ever to the long-term sustainability of the economy. High-impact entrepreneurs are innovators. They spark the revitalisation of mature industries, as well as the creation of new ones. Whether it’s through better connectivity, ease of doing business or improving quality of life, entrepreneurs challenge our views of what’s possible and create new opportunities for progress.
Australia is home to some truly world-class entrepreneurial talent. In the 15 years that we have been running the EY Entrepreneur Of The Year awards in Australia, we have seen an incredibly high-calibre of entrepreneurs across an incredibly wide range of fields coming through the program.
We are lucky to live in a country which has a relatively favourable environment for entrepreneurial activity. In fact, EY’s G20 Entrepreneurship Barometer found Australia ranked among the top quartile of G20 countries when it came to having an ecosystem that supported entrepreneurship – alongside the US, Canada, South Korea and the UK. But that doesn’t mean there isn’t more that needs to be done to create an environment that helps foster entrepreneurial businesses.
Small capital markets are a key hindrance for entrepreneurship in Australia. Historically, we have attracted lower levels of private equity compared to other mature markets and the entrepreneurs we surveyed also reported seeing deterioration in access to bank loans, venture capital and government funding. One of the largest challenges for any entrepreneur is accessing capital to fund their growth plans. Expanding into new markets, developing new products, hiring the right people and investing in the right people all take money. The best business plan in the world isn’t worth the paper it’s written on if there is no investment to support it.
In this environment, any measures that support investor confidence and attract new sources of funding will be important in ensuring Australia’s entrepreneurs don’t miss out on opportunities to scale their businesses and create future growth. The development of alternative funding sources, such as crowdfunding, may go some way towards addressing the issue but governments and companies also have a role to play.
Our research found Australian entrepreneurs also want to see simplified tax rules and regulation, as well as a reduction of corporate income tax and an increase in tax incentives focused on innovation. A thriving entrepreneurial culture is critical to diversifying Australia’s business economy, so the state and federal governments should ensure they are listening to the needs of entrepreneurs.
The good news is that entrepreneurial ambitions remain strong. EY’s recent global youth entrepreneurship survey found that almost half of young Australians wanted to run their own business at some point in their careers. As well as increased access to funding, what young people with entrepreneurial ambitions said they would value most was guidance and support from existing entrepreneurs. There is a real opportunity for established entrepreneurs to provide mentoring through internships and make a tangible difference.
Incubators also play a major role in a thriving entrepreneurial culture. Countries like Israel, with more fledgling businesses per capita than any other nation, crucially excel at incubating and growing start-ups. Their supportive infrastructure, coupled with an informal business culture that de-emphasises status and age but recognises talent and drive, provides a solid foundation for growth.
Here in Australia, we also need to ensure that we are giving future generations of entrepreneurs the tools and environment that will enable them to succeed. Entrepreneurship should be seen as a viable career choice and a valid alternative to more traditional jobs. We need to remove the stigma of failure, champion entrepreneurship, promote united thinking in policy and business environments, and co-ordinate support across the private, public and voluntary sectors.
The message is clear – governments, entrepreneurs and companies have to work together. Only then can we drive the growth and diversity needed to ensure Australia’s economic sustainability.
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