The Engine Room for Growth? The Role, Performance and Future Prospects of Small Business in Western Australia
BCEC launched the latest Focus on WA report The Engine Room for Growth? The Role, Performance and Future Prospects of Small Business in Western Australia, on Friday 26 May 2017 at the Hyatt Regency Hotel in Perth.
The 2015 Federal Budget referred to small businesses as the ‘engine room’ of the economy and Australia’s changing economic landscape means governments are placing greater emphasis on the important role of small businesses for growth and employment. This is not unique to Australia, with small firms seen as the driving force of growth across many of the developed OECD nations.
The report examines the history of WA’s small business sector, its current contribution to the WA economy, and the future prospects for small businesses in the State. It profiles the evolution of the small business sector in WA, and the current challenges and opportunities being faced by small business owners.
The report is anchored by the new BCEC Small Business Survey 2017. A random sample of 1,500 businesses were surveyed, providing further insights into the specific opportunities and challenges faced by the WA sector and helping to frame policy discussions in this area.
The Honourable Paul Papalia MLA, Minister for Tourism; Racing and Gaming; Small Business; Defence Issues; Citizenship and Multicultural Interests in WA, welcomed almost 200 guests to the release of the Centre’s ninth report in the Focus on WA series.
The Minister discussed the importance of the small business sector, and highlighted the large contribution small businesses make to employment in the State. The Minister also noted “this report will assist and support our work in developing responses to assist small businesses and respond to the challenges faced by the sector.”
Dr John Hewson AM, Professor at the Crawford School of Public Policy, Australian National University; Nadia Mitsopoulos, Journalist for ABC Radio Perth; David Eaton, Small Business Commissioner at the Small Business Development Corporation; Sharon Grosser, Co-Founder of SEQTA Software; Professor Alan Duncan, Director at the Bankwest Curtin Economics Centre; The Honourable Paul Papalia, Minister for Tourism; Racing and Gaming; Small Business; Defence Issues; Citizenship and Multicultural Interests in WA and Dr Daniel Kiely, Senior Research Fellow at the
Bankwest Curtin Economics Centre.
Speaking to the findings at the launch of the report, BCEC Director Professor Alan Duncan noted the small business sector is an enormous contributor to Western Australia, accounting for 42 per cent of the State’s employment and contributing almost $40 billion to the economy – second only to mining.
“These figures, impressive though they are, don’t capture the full contributions of small businesses to the State’s economic trajectory, nor the critical role that small business owners play in supporting communities, especially in regional WA,” Professor Duncan said.
Professor Duncan went on to explain one of the main challenges faced by the small business sector was the problem of late payments by big businesses.
“Late payment is a huge problem for small business owners in Western Australia, and adds significantly to the financial stresses they face on a daily basis in maintaining and growing their businesses.”
Report co-author and BCEC Senior Research Fellow Dr Daniel Kiely said one of the most important domains of the BCEC Small Business Survey 2017 relates to the health and wellbeing of small business owners in WA. Dr Kiely explained that over 60% of respondents reported high or very high stress levels.
“Late payments create unnecessary hardship and stress for small business owners, especially in such difficult economic times, and should be eradicated. Given small businesses play such a critical role in our economy, it is important we listen to what small business owners are telling us are the greatest barriers to their ongoing success,” Dr Kiely said.
Expert panellists also highlighted the need to package workforce, information and skills, and mental health programs to not only drive the sector’s future economic prosperity, but to respond to the challenges, and the financial stresses small business owners face on a daily basis in maintaining and growing their businesses.
WA Small Business Commissioner, Mr David Eaton, from the Small Business Development Corporation welcomed the release of the report and commended the efforts of small businesses in WA stating that “the small business sector has no shortage of passion and grit.” David also discussed the need for small business owners to possess the necessary skills to drive their businesses to succeed.
SEQTA Software Co-Founder, Ms Sharon Grosser, portrayed the very real challenges faced by small business owners and shared her journey of launching a tech start-up, which resonated loudly through the room.
Dr John Hewson AM, Professor at the Crawford School at the Australian National University, former Leader of the Liberal Party and Federal Coalition in Opposition and BCEC Professorial Fellow was also among esteemed panellists.
Dr Hewson promoted the importance of governance, but of particular interest to attendees was his comment on one of the many challenges faced by the sector – “the biggest constraint in starting up a small business is the red tape involved in those initial stages.”
Professor Duncan said the report confirmed the importance of the small business sector to WA’s economy, and to the State’s diverse communities.
“The report highlights the critical role that small businesses play in driving growth, creating jobs, and generating some of the most creative and innovative ideas to enhance Australia’s productivity.”
The report generated much media interest, including articles in The West Australian, Business News, ABC and News.com.au. Public debate also filtered onto Twitter, with #smallbiz trending throughout the day.
Following the report launch, the Business Council of Australia released the Australian Supplier Payment Code, an industry-led initiative ensuring small business suppliers are paid within 30 days of issuing invoices. The Council of Small Business of Australia also cited the BCEC report findings in their media response to the new code announcement.
BCEC’s Focus on WA report series continue to add to the discussion around the future of WA’s economy, and this latest report highlights the impact BCEC’s research can have on changing the lives of West Australians.