This staff research paper is the first in a series to explore the dynamics of employment and productivity growth in Australian firms. The paper examines the contribution of young firms (particularly startups) to net job creation between 2001 and 2011.
The results show that:
- young SMEs (0–5 years) contribute disproportionately to job creation
- young SMEs made the highest contribution to net job creation in Australia (40 per cent) and startup activity (0–2 years) is responsible for most of this growth
- Australia’s start-up activity is high but Australian start-ups tend to reach smaller sizes relative to other OECD countries examined
- a very small fraction (3 per cent) of startups drive the majority (77 per cent) of their positive post-entry job creation
- these high growth startups also show superior sales and profit performance but lower labour productivity performance compared to other surviving startups
Authors: Luke Hendrickson, Stan Bucifal, Antonio Balaguer and David Hansell