Employment Dynamics of Australian Entrepreneurship: A Management Perspective

Abstract

This article attempts to draw together the literature on high-growth firms and management capability using Australian Government data from the Expanded Analytical Business Longitudinal Database. We tracked cohorts of new micro-sized firms (startups) over five years from birth. Compared with startups that had a low employment growth trajectory, mediumand high-growth micro-startups exhibited higher financial performance, higher innovation activity, and a greater propensity to seek external (debt or equity) finance. From a management perspective, medium- and high-growth startups were also significantly more likely to monitor and assess their performance across a wider range of performance indicators. High-growth micro-startups exhibited significantly higher operational process and organizational/managerial innovation, a higher likelihood of foreign ownership, and a greater demand for equity finance than medium-growth micro-startups. This data is consistent with other evidence that suggests that sustained high growth comes from superior strategic management and may suggest an ongoing role for government policy in building firm management capability in order to foster employment growth. Entrepreneurs – the most successful, though not the only, practitioners of innovation – rarely stop to examine how they do it. Most of them simply get on with the job of creating value by exploiting some form of change – be it in technology, materials, prices, taxation, demographics, or even geopolitics.