The effect of age on Australian small-to-medium enterprises

Date published:
1 April 2016

This staff research paper uses the ABS Business Characteristics database to explain the effect of age on small to medium enterprises.

Younger SMEs are found to be more likely to report increases in:

  • employment and training
  • income from sales
  • profitability
  • productivity
  • product range.

Startup SMEs are also more likely to engage in collaborative product, process and marketing innovation, and to engage in new-to-market innovation.

These results are consistent with international evidence and suggest that innovation capability is one of the characteristics driving higher growth outcomes for young Australian SMEs.

The findings support policy initiatives that can facilitate the right conditions for innovative entrepreneurship and startup activity in support of growth, innovation and skills development.

Authors: Roger Smith and Luke Hendrickson