The most common age for an Australian small business owner revealed
The small business sector is now facing “demographic challenges”, the Australian Small Business and Family Enterprise Ombudsman says.
The most common age for a small business owner is now 50 years old, the Australian Small Business and Family Enterprise Ombudsman says, ahead of a fresh Intergenerational Report expected to highlight the need for economic dynamism and fresh entrepreneurial energy.
On Wednesday, Ombudsman Bruce Billson said the most common age for a small business owner has increased since 2006 when it was 45 years of age.
The small business sector is now facing “demographic challenges”, he said, as only 8% of current small business owners are aged 30 or below.
That figure is even lower in the retail sector, where just 6% of businesses are operated by those under 30.
The proportion of businesses operated by young Australians has fallen dramatically since the 1970s, he added.
Intergenerational Report to flag a growing, ageing population
The startling age data was first released by ASBFEO in a June snapshot of the small business landscape.
But those findings have been revitalised by the impending release of the next Intergenerational Report, which is set to project the challenges and opportunities facing the Australian economy over the next four decades.
That report, set for release on Thursday, is broadly tipped to show the Australian population will grow to 40.5 million by 2063.
At the same time, the population is expected to become older overall.
“Australians are expected to continue living longer and remain healthier to an older age, while having fewer children,” the report says, according to an excerpt obtained by The Guardian.
“This is leading to an ageing and a slower-growing population,” with major ramifications for Australia’s tax base and its expanding care economy.
Youth entrepreneurialism a hot topic
With small businesses representing around 97% of all businesses in the Australian economy, it is important that young entrepreneurs are encouraged to take over from their forebears, Billson said.
The sector “stands at the epicentre of this mission and energising enterprise will help deliver the growth to meet future needs,” he added.
“We need to replenish and nurture the next generation of entrepreneurs, value self-employment and encourage and enable smaller enterprises and the livelihoods they make possible.”
Market dynamism and the need for fresh competition to major businesses are also matters of national significance.
Since assuming office, Assistant Minister for Competition, Charities and Treasury Andrew Leigh has continuously flagged the need for market competition, and new business entrants, to help accelerate productivity.
Through that lens, it is vital to contemplate why so few young Australians are launching their own small business compared to generations prior.
“We need to understand why it is not as appealing as it perhaps should be for younger Australians to own a small business?” Billson asked.
Some experts have already put forward potential reasons.
After reporting similar findings on the age of Australian entrepreneurs in March, CPA Australia senior manager of business and investment policy Gavan Ord said young entrepreneurs often find it difficult to access startup capital, as they may not own a home to use as leverage.
The perceived risk-reward ratio of launching a new business may not stack up compared to simply taking a job at an existing workplace, he added.
CPA Australia called on the federal government to undertake an inquiry into the low rates of entrepreneurship among young people compared to other nations in the Asia-Pacific region.
