Is Australia the best country to be an entrepreneur?

Despite downward confidence of the Australia economy, the overall conditions look strongly positive for future entrepreneurs. Australia has a strong education system and research culture which is an important element to produce entrepreneurs in all industries from retail to biotechnology. The biggest weakness are skills and funding, which can be hard to find for some businesses.

Whilst Australia is vulnerable to a major downturn in China, which has been the main reason for the country’s relatively insulation from the economic crisis since 2008, there is significant potential for entrepreneurs to expand in line with the rise of major economies in the Asia region.
EY (Ernst and Young) has ranked Australia to be in the top 25% among the G20 economies to conduct entrepreneurial activity according to their recent EY G20 Entrepreneurship Barometer 2013 report.

The study rated the G20 countries in 5 categories of the entrepreneurial ecosystem: Access to funding, Entrepreneurship culture, Tax and regulation, Education and training, and Coordinated support. The report consisted of both qualitative data (from a survey of over 1,500 entrepreneur) and qualitative data based on entrepreneurial conditions across the G20 countries. It also sources from EY’s own research of more than 200 government leading practices.

When ranked across all five categories, Australia, Canada, South Korea, UK and US are in the top quartile.

Australia came in the top ten for all but one category (co-ordinated support) and the top five for all but two.

Australia was rated fifth in both the access to funding and entrepreneurship culture categories.

Access to funding

• Small capital markets make access to funding a key weakness. Entrepreneurs surveyed in Australia report a marked deterioration in funding in recent years, especially when referring to bank loans, IPOs and sources of seed funding.
• One in five entrepreneurs in Australia report a great improvement in access to crowdfunding. This new source of funding could help relieve the pressure on more traditional funding methods, while also funding ventures that lack the prerequisites needed for other sources of capital.
• Failing access to VC funding could lead to more entrepreneurs leaving to start enterprises aboard.

Statistic
44% of entrepreneurs surveyed under 40 find it very difficult to access funding.

Entrepreneurship culture

• Australia has a strong innovation framework, with high levels of Government funding for R&D and a high proportion of scientists and researchers.
• Entrepreneurship is not seen favourably as a career choice, according to local entrepreneurs surveyed.

Statistic
Australia publishes more scientific and technical journal articles (per 10,000 people) than any other G20 nation.

Tax and regulation

• Starting a business is easy – The World Bank rates Australia as the second easiest country in the world in which to set up a new enterprise.

Statistic
It takes only 2 days to set up a business in Australia, compared with the G20 average of 22 days (2010-12 average).

Education and training

• Australia has a strong education system with high enrollment rates. It leads the G20 on secondary school enrollment rates and also performs strongly on tertiary education enrollment.

Statistic
50% of local entrepreneurs report improvement in entreprenuership-specifc courses at universities and business schools.

Co-ordinated support

• Some 29% of entrepreneurs surveyed say that improving Government start-up programs would be the key to accelerating entrepreneurship in Australia.
• A challenging national fiscal and economic environment could result in cuts to entrepreneurship programs.

Statistic
Only 12% of local entrepreneurs surveyed have used or intend to use university incubators this is less than a third of the G20 average of 42%.

Ranking Table

Source: The EY G20 Entrepreneurship Barometer 2013