Entrepreneurship dynamics in Australia: lessons from microdata

Date published:
1 December 2017

This staff research paper explores the dynamics of entrepreneurship in Australia and their evolution over time. It uses a large firm-level dataset covering years 2002 to 2015.

Key points:

  • The rate of firm entry in Australia has been declining since 2005.
  • Firms that entered after 2005 also face more risks and a higher probability of exit.
  • Small young firms are the main engine of jobs growth in Australia, and a declining number means lower job creation.
  • Productivity growth can also be slowing down as a result of diminishing resources reallocation to small firms.
  • However, the potency of job creation among individual young firms has not subsided and is even increasing.
  • There is space for policy consideration to assist entrepreneurs, once the reason behind the declining trend is understood.

Author: Sasan Bakhtiari