Australia punching above its weight when it comes to entrepreneurship

Australia is ranked sixth in the world, and first within the Asia-Pacific region, in a new ranking of the impact of entrepreneurs on their overall economy from Shopify. 

Australian entrepreneurs in the Shopify ecosystem generated over AUD$42.1 billion worth of business activity in 2022 and contributed AUD$17.7 billion in GDP impact.

The Shopify Entrepreneurship Index, spanning 40 countries, is a new study in partnership with Deloitte using data on the millions of entrepreneurs in Shopify's ecosystem and public data from the IMF, OECD, and World Bank data for the purposes of economic modelling. 

"Entrepreneurs are the fuel that drives economies forward. They create jobs. They anchor communities. They make an impact that goes far beyond their own business," says Harley Finkelstein, President of Shopify. 

"Previously, there wasn't enough public data showcasing the superpowers and impact of entrepreneurship, and that is why we created the Shopify Entrepreneurship Index. Our goal is to give decisionmakers the insights they need to reduce barriers and make entrepreneurship even more accessible to everyone."

Australia fosters innovation and entrepreneurship  

Australian entrepreneurs are punching well above their weight, ranking third in the world when considering their direct impact on GDP – behind only the US and UK. Countries were also rated on the impact entrepreneurs have on job creation. The Index highlights that Australian entrepreneurs have directly created over 69,000 jobs, and supported over 151,000 jobs in total, ranking Australia 6th, behind the US, Vietnam, India, China and the UK. Globally, the number of jobs supported by entrepreneurs reached 5.2 million. 

Australia's success, in part, can be attributed to conditions that favour entrepreneurship. Businesses in Australia benefit from the country's well-developed physical and digital infrastructure and highly skilled workforce. The 2023 United Nations Conference on Trade & Development Technology & Innovation Report ranked Australia first globally for the skills needed to use, adopt and adapt frontier technologies.

"Australia has a digitally savvy population, and retailers have caught onto this by doing really innovative things with technology," says Shaun Broughton, Managing Director, APAC & Japan at Shopify.

"We see this in the adoption of cutting-edge tools like AI, and virtual reality to enhance the customer experience.

"Australian entrepreneurs are already at the forefront of using technology to drive growth, so it's exciting to see the impact that they're having on the country's economic impact as a whole."

Australian businesses also enjoy a number of government initiatives that encourage entrepreneurship, with programs to upgrade digital tools, cyber security, and energy efficiency, including a number of initiatives announced at the recent May Budget. 

Opportunities for growth 

Regional and rural entrepreneurship is a major growth opportunity for Australia with 71% of Australian entrepreneurs running their businesses from inside a major city, which is exceptionally high, considering its geographical size. This makes Australia the fourth most-reliant on its major cities, tied with Lithuania and behind smaller countries such Iceland, South Korea, and Colombia.

"Australia is punching above its weight on many fronts, but there is still significant untapped potential," adds Shaun Broughton, Managing Director, APAC & Japan at Shopify. 

"Australia can further boost its global standing by supporting the growth of more businesses in regional and rural areas."

As the majority of our business activities are concentrated in major cities, it fosters a dynamic atmosphere and creates job opportunities. However, the rise of ecommerce means businesses in regional Australia can now reach the same metro, or even global audience, as their big city peers - while spending much less on property than their counterparts.

Entrepreneur-led exports remain an untapped opportunity for Australian businesses. The Shopify Entrepreneur Index shows that Australian entrepreneurs exported AUD$2.8 billion worth of goods in 2022, which represents a small decline of -0.8%. 

Currently, Australian entrepreneurs are selling to an average of ten international markets, reaching 92 million international shoppers, which accounts for 30% of online store visitors. Australia saw the most significant decline in growth, at 32nd globally. But the silver lining is that a more competitive investment in export strategies would have pushed Australia into the top five countries for entrepreneurship.

Further insight from the data shows:

• Globally the USA ranks first, followed by Lithuania and Romania.  
• Regionally, the Asia Pacific region dominates the Index with four countries in the top 10 Australia, China, Hong Kong and Japan and 10 countries in the top 40. 
• Combined, Shopify entrepreneurs around the world supported 5.2 million jobs (+8.3% from 2021), generated $27.7 billion USD of exports (+7%), contributed $229.3 billion USD to GDP (+8.8%) and created $490.5 billion USD in economic activity (+8.6%). Vietnam saw the second highest number of jobs supported (471,474) only behind the US. 
• Australia led the ranking for Asia Pacific, ranked 6th globally, just behind the US and UK, and has the third-highest GDP impact from entrepreneurs at $17.7 billion AUD. 
• Hong Kong significantly punched above its weight, ranking 9th and merchant impact on GDP growing 17.8%. 
• Japan is Asia's success story with the impact of Shopify entrepreneurs up across every metric: exports increased 29%, business activity and jobs supported are up 24%, and GDP impact is up 23%.