Entrepreneurship is often considered the lifeblood of thriving economies around the world, and Australia is no exception. With a unique blend of natural resources, cultural diversity, and vibrant cities, Australia offers a fertile ground for entrepreneurial ventures to flourish. But what makes one ecosystem different from others? How might we measure the impact of entrepreneurship as it scales through our cities, business, cultural and social landscapes?
Shopify’s recently launched Entrepreneurship Index (SEI) is an attempt to measure the economic impact of entrepreneurs in Shopify’s ecosystem. The index looks at the impact on national economies, and tracks the fastest growth and greatest contributions globally. Of course, the index only measures activity that occurs through the Shopify platform – but with a significant footprint, it could be seen as a useful proxy for wider datasets.
The index helps us understand the role of entrepreneurship and why it’s considered an important and powerful force.
Entrepreneurship drives innovation
Entrepreneurs are often considered the catalysts of innovation – pushing boundaries and challenging the status quo. In Australia, entrepreneurial ventures have played a crucial role in introducing disruptive technologies, developing new business models, and driving forward industries such as fintech, renewable energy, healthcare, and eCommerce. By introducing innovative solutions and products, entrepreneurs stimulate economic growth, attract investment, and position Australia as a global and regional hub for cutting-edge ideas and technologies.
Entrepreneurship creates jobs
One of the most significant contributions of entrepreneurship to local economies is job creation. As entrepreneurs launch and scale their ventures, they create employment opportunities, reducing unemployment rates and empowering communities. Small and medium-sized enterprises (SMEs) comprise a significant portion of the Australian economy, and are often considered the “engine room” of the economy. By fostering an entrepreneurial ecosystem, Australia’s government and business sectors encourage the emergence of startups, which are known for their agility, adaptability, and capacity to generate employment opportunities even during economic downturns. The SEI indicates that over 150,000 jobs are supported by entrepreneurs in Australia.
Entrepreneurship stimulates economic growth
Spurring productivity, fostering competition, and attracting investment, entrepreneurship multiplies its impact across local, national and global economies. Successful entrepreneurial ventures pay taxes which can be allocated towards infrastructure development, education, and public services. The scaleup business often serve as anchors in their local communities, attracting tourists, driving local spending, and creating a ripple effect on related industries. This is why governments seek to attract startups and scaleups – scale brings scaleable benefits. The SEI indicates that over $29 billion worth of business activity is generated by entrepreneurs in Australia.
Entrepreneurship develops regional economies as well as cities
Entrepreneurship plays a vital role in the development of regional economies in Australia. We are seeing growth in non-metropolitan centres that encourage startups and small businesses. By creating the conditions for startups to thrive, local communities become revitalised, attract talent and investment, while generating economic activity and improved living standards. And of course, entrepreneurship enables rural and remote areas to tap into global markets, leveraging digital technologies to overcome geographic barriers and create economic opportunities. The Shopify Index indicates that 29% of entrepreneurs are located in rural areas – and given the changing patterns of work, we can expect this to continue to grow.
It’s great to see that the Shopify Entrepreneurship Index is to be updated on a quarterly basis – so it will be interesting to watch if and when these high level statistics change. And the more we can understand the triggers and impacts of entrepreneurship the better governments, businesses and entrepreneurs themselves can plan, support and grow our entrepreneurial ecosystems.