The entrepreneurial spirit is alive and kicking in Australia.
The country remains one of the best places to start your own business with over 15% of the population being engaged in entrepreneurial activity.
Ready to hear some essential entrepreneurship statistics and facts that will help your business take off?
Top Ten Fascinating Facts About Entrepreneurs
- 10.5% of Australian adults were engaged in early-stage entrepreneurial activity.
- The start-up rate in Australia was 5.8% in 2020.
- New investment deals for start-ups in Australia reached AU$86 million in 2019.
- Most Australian startups operate in fintech and banking industries.
- The ease of doing business score in Australia stood at 81.2 in 2019.
- 18,484 new businesses were registered in Australia in December 2020.
- Sole proprietors have the lowest survival rate.
- Australian entrepreneurs are half as likely as their US counterparts to start a business.
- There were more than 582 million entrepreneurs in the world in 2020.
- 30% of businesses in Australia are owned by women.
General Entrepreneur Statistics in Australia
1. How many Australians start their own business?
10.5% of the population aged 18 to 64 years was engaged in early-stage entrepreneurial activity during the 2019 survey period, indicating they were beginning a company or have already started one that is less than 42 months old.
According to the survey on entrepreneurship in Australia:
- 8.3% were engaged in entrepreneurial employee activity
- 6.5% had an established business
- 5.8% reported they were just starting out
- 5.1% were involved in starting a new business
2. The start-up rate in Australia was 5.8% in 2020.
Globally, Chile had the highest start-up rate with 19.8%, while Italy had the lowest with 0.9%. Australia is in 6th place with 5.8%.
3. New investment deals for start-ups in Australia reached AU$86 million in 2019.
This represents a decrease in value, however, the number of investment deals was the highest between 2006 and 2019. In addition, there were about 43 follow-on investment deals for start-up businesses, valued at AU$59 million.
4. Most Australian startups operate in fintech and banking industries.
Fintech adoption in Australia reached 58% of the digitally active adult population, according to a survey carried out in 2019. This was more than four times the country’s expected adoption rate in 2015. What’s more, Australia’s fintech investment value was estimated to be around US$563 million in the second quarter of 2021.
Thus, it comes as no surprise that most of Australia’s startups operate in this area, with payments, wallets, and supply chain technology standing out as the leading type of fintech organisation.
5. Around 37% of venture capital investments in Australia were made in the services industry.
These funds were routed to Australian enterprises through venture capital limited partnerships (VCLPs), an Australian government program. The total value of Australian-based venture capital funds raised stood at AU$1.33 billion in 2020.
6. Judo Bank Australia is the leading startup based on funding.
Judo Bank was the leading Australian start-up as of May 2020, with 1.5 billion US dollars in funding. Judo Bank is a prominent challenger bank entering the Australian banking market, focusing on small and medium-sized business lending. It is followed by web design platform Canva (US$241.6 million in funding) and investing company Spaceship (US$71.1m).
Statistics on Australia’s Business Climate
7. The ease of doing business score in Australia stood at 81.2 in 2019.
(Statista, Trading Economics)
The Ease of doing business index rates countries based on how much their regulations support business operations. According to the latest reports, Australia ranks 14, going down from 18 in 2018.
8. Around 2.4 million trading businesses were active in Australia in 2021.
(Australian Bureau of Statistics)
There were 2,402,254 active trading businesses in June 2021, ABS estimates.
More specifically, there was a:
- 3.8% (87,806) growth in the total number of businesses
- 15.8% entry rate (365,480 entries)
- 12.0% exit rate ( 277,674 exits)
Medium-sized companies (with 20–199 employees) saw the biggest annual growth in 2020/21. Their number went up by 20.6%, whereas non-employing businesses witnessed a drop of 2.2%, going down to 1,410,049 total.
In terms of industry, Construction statistics reveal that this sector saw the biggest net increase from 16,603 to 410,839 businesses, followed by Professional, Scientific and Technical services (316,462 businesses) and Health Care and Social Assistance (159,076 businesses).
9. 18,484 new businesses were registered in Australia in December 2020.
In December 2020 alone, there were 2,830,764 company registrations, over 18,000 of which were new businesses. Most of these new organisations were registered in New South Wales (6,586) and Victoria (5,298).
Overall the number of new businesses stood at a little more than 344 thousand in 2020, while the total number of companies in the country is estimated at 42 million.
10. There were 31% more millionaires in 2020.
The number of millionaires increased by 31% from 485,000 to 635,000 in 2020, the most considerable growth in Australia’s recent history. In addition, these millionaires own $2.77 trillion in investable assets (up 37%).
Small Business Statistics in Australia
11. There were 2.3 million small businesses in Australia.
(The Australian Small Business and Family Enterprise Ombudsman)
A small business is defined as one that employs less than 20 people. Based on that definition, small enterprises accounted for 97.4% of all businesses in Australia in 2018/2019.
Further statistics and facts on small business show that:
- These enterprises are the biggest employers in the country, giving jobs to over 4.7 million people and accounting for 41% of the business workforce.
- Small businesses contribute around $418 billion of value added, which translates to 32% of the country’s GDP.
12. Small businesses increased their marketing budget during the pandemic.
(The Australian Small Business and Family Enterprise Ombudsman, Consultancy.com.au)
In 2018/2019, 54.5% of small businesses had a web presence, while 47.8% were active on social media. More than half were involved in ecommerce, with 63% placing orders and 41.4% receiving orders online.
During Covid-19, though, 73% of small businesses’ marketing budget was spent on online promotion, with the percentage increasing to 74% post-national lockdown. 46% became more active on social media and 34% founded a new website, while less than a third made services and products available online.
For more information on starting an online business in Australia, take a look at this guide.
13. Sole proprietors have the lowest survival rate.
(The Australian Small Business and Family Enterprise Ombudsman, CB Insights)
Non-employing businesses have a survival rate of 60% over five years, the lowest compared to large companies (200+ employees) which noted a survival rate of 87%.
According to small business success statistics by CB Insights, 38% of startups failed because they ran out of money, whereas 35% did not succeed because there wasn’t a market for their services.
Other reasons include:
- Too much competition: 20%
- Flawed business model: 19%
- Regulatory issues: 18%
5% said they no longer felt any passion for their business while 7% cited disagreements with the team and investors.
Attitudes and Perceptions of Australian Entrepreneurs
14. The majority of entrepreneurs see acquiring wealth as the main reason for starting a business.
64.5% of participants in an online survey said they started their company to make a lot of money. Around half of those surveyed (51.7%) wanted to make a difference and just over 20% of entrepreneurs in early stages were interested in continuing a family tradition.
15. Australian entrepreneurs are half as likely as their US counterparts to start a business.
Only 5.8% of Australians are in the process of starting a business compared to 11.8 per cent of Americans. Despite Australia ranking very well for doing business, just two-thirds of residents believe that is the case.
How do Aussies perceive entrepreneurship? Entrepreneurship stats reveal the following:
- 70% of people aged 18 to 64 think they have the knowledge, skills, and experience needed to start a company.
- 63.7% agree that they rarely act on lucrative opportunities when they see them.
- 55.9% know someone who has launched a company in the previous two years.
- 45.7% believe there are good opportunities to open a company in their area.
16. Australia is the second best country for social entrepreneurs.
(Pro Bono News)
In comparison to the original 2016 survey, Australia improved the most, rising 24 places. Strong government measures to assist social entrepreneurs and a friendly environment for enterprises were credited for the improved ranking.
Entrepreneurship Demographics Across the World
17. What percent of the population are entrepreneurs?
Judging by data from Global Entrepreneurship Monitor, the number of entrepreneurs hit 582 million in 2020, meaning that around 1 in 15 people in the world is an entrepreneur.
Looking at data by region, entrepreneurship levels were highest in the Middle East & Africa with almost half of adults in Angola starting or operating a new business.
18. Across the world, start-ups are most common among the 25 to 34 generation.
The tendency to start a business increases with age, thus the youngest generation is the least likely to become entrepreneurs. The propensity to start or operate a new business also decreases with age, so older groups are also less likely to engage in entrepreneurship.
19. 81% of the entrepreneurs own or manage a business with family members.
- 75% of entrepreneurs and 81% of established business owners co-own and/or co-manage their companies with family members worldwide.
- 62% of verified business owners say that most of their current employees are family members.
Women Entrepreneurs Statistics
20. 30% of businesses in Australia are owned by women.
(Statista, Women’s Agenda)
This puts the country at 8th position on the Mastercard Index of Women Entrepreneurs (MIWE). Globally, Angola has the highest percentage of female entrepreneurs (51.1%), however, most of it is necessity driven entrepreneurship.
21. 45% of female entrepreneurs in Australia started their business as a passion or hobby.
Almost half of women who start their own business are motivated by their passion or hobby. 35% of male entrepreneurs, on the other hand, were motivated by financial independence.
22. Women face greater challenges in accessing financial accounts and services than men.
(The World Bank, OECD)
According to female entrepreneur statistics by the World Bank, 72% of men have access to a financial account compared to 65% of women. Men are also more likely to borrow and save to start, operate or expand their businesses. 13% of male entrepreneurs in the world borrowed money while 17% saved. The numbers for women stand at 10 and 11%, respectively.
In Australia, 75% of women started their business through self-funding as opposed to 71% of men who did the same, which is surprising considering the gender pay gap that is still prevalent in the country. Moreover, 9% took out a bank loan compared to 19% of men who did so. Finally, 11% borrowed money from their husbands, while 7% borrowed from other family members.
23. 34% of businesses worldwide are owned by women.
(The World Bank)
One in 3 small, medium and large businesses are owned by women with rates varying from high (50% in Latin America & Caribbean) to low (18% in South Asia).
Australia is still a great place to start a business despite setbacks caused by the Covid-19 pandemic. Small businesses in the country have quickly adapted to changes and continue to drive growth in the country’s economy.
So if you are thinking of starting a business in Australia on your own or through one of the profitable franchises in the country, take note of these entrepreneurship statistics and use them to build a better and more successful organisation.
- Australian Bureau of Statistics
- CB Insights
- GEM Consortium
- GEM Consortium
- Pro Bono News
- Property Update
- The Australian Small Business and Family Enterprise Ombudsman
- The World Bank
- Trading Economics
- Women’s Agenda