May 08, 2017 / News
It's no secret that large corporations often take up a sizeable chunk of media attention, with their performance being portrayed as either invaluable or detrimental to the state of the economy. Although, it cannot be denied that these large businesses do make a significant impact on the Australian economy, small to medium-sized businesses play a critical role in determining its strength.
According to the Department of The Treasury, of the 2,132,412 Australian businesses that were active as at June 2011, roughly 96 per cent of them were small businesses and 3.8 per cent were medium businesses. Large companies only made up approximately 1 per cent. This overwhelming majority of small and medium enterprises (SMEs) highlights that despite their small size individually, collectively they have significant ripple effects on the state of Australia's economy.
A key reason that small and medium-sized businesses are important to the Australian economy, is that they are a major source of employment for Australians. According to the Reserve Bank of Australia (RBA), SMEs employ approximately 70 percent (47 percent employed by small businesses and 23 percent employed by medium businesses) of Australia's labour force. Small and medium-sized businesses often provide more employment opportunities for unskilled workers, and help to drive down the unemployment rate. This can have positive flow-on effects, such as a lowered crime rate, decreased welfare dependency, improved standard of living, and so on.
Another key reason that small and medium-sized businesses are important to the economy, and the business landscape in general, is that they are a major source of innovation for the industries they operate within. In order to keep up and effectively compete with larger corporations with more resources, SMEs innovate to gain a competitive advantage. Innovation in small and medium-sized businesses help to stimulate healthy competition in the market, and increase choice for the customer. SMEs have been responsible for some ground-breaking innovations, such as Workfast's on-demand platform that has made hiring cheaper and more efficient.
Small and medium-sized enterprises are an integral component of Australia's economic fabric. SMEs make up the bulk of the businesses currently operating in Australia and contribute significantly to innovation, employment and wealth generation. Small and medium-sized enterprises are the backbone of the Australian economy. So, when small and medium-sized businesses do well, we all do well.
Are you a small to medium-sized business owner looking for additional workers to help you out? Look no further! Contact Workfast via the website or call 1300 824 403.