The grass may always seem greener on the other side, but as a new report indicates, local entrepreneurs actually have it pretty good. Australia’s entrepreneurial environment has been ranked fifth among G20 countries.
Of course there’s always more to be done. According to Ernst & Young’s (EY) latest G20 Entrepreneurship Barometer, Australia must work harder to encourage and support local entrepreneurship.
Annette Kimmitt, partner at EY, believes governments, corporations, and entrepreneurs need to work together to foster a strong environment that supports entrepreneurial businesses.
“Our biggest challenges in fostering entrepreneurs lie in access to skills and funding, as well as the perception of entrepreneurship as a viable career choice,” Kimmitt said.
“Addressing attitudes towards business failure and improving communication around success stories would go a long way to positioning entrepreneurship as a valid alternative to more traditional jobs,” she added.
The barometer ranks G20 countries across five key areas: access to funding, entrepreneurship culture, tax and regulation, education and training, and coordinated support.
Despite Australia’s top five position in the area of entrepreneurship culture, just 48 per cent of entrepreneurs surveyed believe that Australia has a culture that encourages entrepreneurship, down from 80 per cent in 2011.
This is also reflected in Australia’s tax and regulation ranking. Some 53 per cent of Aussie entrepreneurs would like to see increases in tax incentives focused on innovation.
“Australia’s overall ranking on tax and regulation is impacted by the negative perception of the business environment expressed by local entrepreneurs, who want to see simplified tax rules and regulations as well as reduced corporate tax income,” Kimmitt said.
While Australia ranks fifth in access to funding, 53 per cent of Australian entrepreneurs surveyed stated that access to bank loans has deteriorated, while 37 per cent also said government funding has decreased.
Young entrepreneurs are hit particularly hard by the funding gap. Forty-four per cent of Australian entrepreneurs under 40 reported that they find it very difficult to gain access to funding.
Australia was also found to be lacking in the area of coordinated support, coming in at 15th. While over half the entrepreneurs surveyed said mentoring opportunities had improved, 29 per cent said improving government start-up programs is a must.
“Corporations also have a role to play here, creating corporate incubator or accelerator programs to help provide entrepreneurs with access to resources, testing facilities, pilot customers, and funding,” Kimmitt said.
Kimmitt believes ensuring Australian entrepreneurs have a strong environment in which to grow is the key to Australia’s future success.
“With the mining investment boom declining, successful entrepreneurial businesses will be more important than ever for future job creation and the sustainability of the Australian economy,” she said.