International MSME Day
27 June 2021
Photo by S O C I A L . C U T on Unsplash
You would have all heard the saying “small business is the backbone of the Australian economy” and I agree. Whatever the current state of your business, all small business owners who have made it through 15 months of a global pandemic deserve congratulations.
Small businesses are under recognised for their contribution to both our economy and our communities. Job creation, innovation and the production of goods and services are driven by small businesses like you.
Part of the reason why small businesses are so important to the economy is sheer volume. According to The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Small Business Count reported that 93% of Australian businesses are considered small business (turning over less than $2m and employing less than 20 people).
Statistics taken from ASBFEO Small Business Counts Dec 2020 report
As a large proportion of the private sector, small businesses have the ability to make a material impact on economic growth. The ASBFEO Small Business Count reported that small businesses made the following contributions to our economy:
$418 billion of value added to GDP, representing 32% of total GDP in 2018-19
Employed 4.7 million people representing Australia’s biggest employer in 2018-19
As st December 2019 employed over 165,000 apprentices and trainees
Small companies accounted for 22% of total tax revenue for the 2017-18 year
For small businesses with up to $5 million turnover, half of all income tax is paid by those businesses with turnover between $200,000 and $2 million, these businesses also account for 71% of GST paid
These statistics show the important role small businesses play in our economy but don’t consider the impact that you, as a small business owner, has on our communities. Small businesses are the birthplace of innovation. ABS data reports that 90% of businesses that engage in innovative activity are small businesses. This is due to technology lowering the barrier to enter into larger markets according to a 2010 OECD report.
Small businesses are also more likely to support other small businesses and organisations in their local communities. This improves the local communities and their economies by supporting local jobs and local production and caters to the increasing desire to shop locally. This is being driven by society's increasing focus on the environmental impacts of our carbon footprints and food miles.
Small businesses are also more charitable considering their size and ability to give to charity. The latest Giving Australia report (2016), showed that 70% of SMEs donated $8.5b in comparison to larger businesses, who gave $9b to charitable organisations. The major reasons for the donations from small businesses were to demonstrate a commitment to their community and a personal connection with the not for profit sector.
Whether you own a small business or work in a small business, these are some of the reasons why the Australian economy relies on your passion and your efforts to grow a business that supports you and your communities. Our most powerful opportunities as business owners and consumers are to choose where we spend our hard earned cash.
Happy International Micro, Small and Medium-sized Enterprises Day to all the strong, tenacious and courageous small business owners and their supporters.
