Wednesday, July 24, 2013

New Economy?

The ABS's Report on business entries and exits provides some insights as to the evolving nature of the Australian economy and how changing technology practices are driving business sustainability. 

Old economy activities such as manufacturing, information services such as libraries and broadcasting, delivery services eg. couriers, exhibited the lowest survival rates for new businesses and are indicative of the increasing capacity for consumers and businesses to access and source these activities on-line, through social media, cloud computing etc.  Between 2003 and 2007, the lowest survival rates for businesses were in the education and communication services sectors.  Don't do it for me, do it with me - businesses servicing the information and knowledge sectors will need to be increasingly savvy around how they deliver these services. 

Here in Queensland, survival rates were highest for new gambling businesses and lowest for beverage and tobacco manufacturing businesses; moving from one fix to another? 

With the reduction in government investment and expenditure it is perhaps not surprising that for Australia overall, the lowest survival rates between 2008 and 2012 were in public administration and safety, administration and support services, and with ongoing government expenditure restraint and cost-cutting, this pattern is likely to continue to be active on the Australian business landscape, for the short term before not-for-profit organisations and private sector businesses explore new funding mechanisms and expansion of their services. 

So where are the opportunities? Business survival rates by industry sector for new business entries to the Australian market between 2007 and 2011 were highest for activities in health care, insurance, superannuation and gambling, perhaps tied to an aging demographic and the retiring of the baby boomer market.  Will our aging economy be the maintstay as investment in the resources sector slows? Changing attitudes and business practices will be key. 

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