Australians: Not Entrepreneurial Model of Life

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Table of Contents

How Entrepreneurial Is Australia?
How does Australia Compare with Other Nations?
Why Should We Care and What Can We Do?
Discussion
Reference List

How Entrepreneurial Is Australia?

Entrepreneurship in Australia

The country’s current level of entrepreneurship is not high enough. Research indicates that the entrepreneurial landscape in Australia has been declining lately, becoming less dynamic and more uncertain (Bakhtiari 2019). New businesses open less frequently, and those that manage to enter the market are inclined to exit much sooner than their equivalents did in previous decades. One of the major reasons for such a quick exit is explained by the outcomes of the global financial crisis (Bakhtiari 2019). The problem is that the entry of new companies into the market is closely associated with the emergence of new jobs and long-term perspectives of the country’s economic growth. Hence, due to the declining entrepreneurship, Australia is under threat of deteriorating its job market and weakening its economy.

Recently, some attempts to improve the situation have been made in the sphere of Australia’s agricultural entrepreneurialism. As O’Keeffe (2019) notes, the rethinking of identities and values can help to recreate the country’s market relations and enhance them. The scholar emphasizes that the Australian agricultural sphere has been poorly investigated by sociologists and geographers, which leads to considerable losses in the market. O’Keeffe (2019) insists that not only economists but also sociologists should participate in the investigation of the agricultural market’s problems. That way, it will become possible to deal with the issues of deregulation and improve the state of agricultural entrepreneurship.

Another potential sphere of business the development of which might help the country to overcome the entrepreneurial crisis is the creative industry. Luckman (2018) remarks that growing ethical concerns and attention to the environment have made craft practices some of the most popular and lucrative in the market. Creative entrepreneurialism enables business people to present their ideas and products in innovative ways. Moreover, new jobs are created due to the self-employment practices of such entrepreneurs (Luckman 2018). Therefore, Australia’s potential in craft entrepreneurship is quite high, and it needs further attention and evolvement.

Opportunities for Indigenous and Immigrant Entrepreneurs

One of the current problems in Australian entrepreneurship is the lack of possibilities given to Indigenous people to develop their businesses. According to Collins and Norman (2018), there is a striking lack of capacity for Indigenous Australians to establish their enterprises and generate working places. Most commonly, Indigenous entrepreneurship focuses on individual efforts, thus leading to insufficient opportunities for business and employment increase for this group of people.

Meanwhile, the conditions for immigrant entrepreneurs in Australia are more favorable. Scholarly research indicates that the representatives of such nations as India, Chinese, and Italian are trying to increase the representation of their goods in the Australian market (Azmat & Fujimoto 2016; Smans, Freeman & Thomas 2014; Wang & Warn 2018a; Wong 2016). Azmat and Fujimoto (2016) note that the Australian market occupies second place in the world for female entrepreneurship development, being preceded only by the USA. For Italian immigrants, it is highly important to establish and maintain a high level of trust with the customers and suppliers (Smans, Freeman & Thomas 2014). Scholars remark that family embeddedness and social relationships are the most decisive factors contributing to the successful business promotion for immigrant people. In this respect, the sociocultural atmosphere in the host country is the major issue affecting productive entrepreneurship endeavors.

Australia hosts a larger Chinese diaspora than any other country outside Asia, so it is necessary to analyze the approaches to entrepreneurship entitled to this community. Wang and Warn (2018a) report that Chinese immigrants have developed a successful approach to entering the Australian market. Scholars note that by employing the break-out strategy, Chinese immigrants were able to turn their enterprises from low return start-up firms to competitive companies targeting the general customer. Having investigated the real estate business in Australia, Wong (2016) remarks that the role of the Chinese diaspora is growing in this segment, reshaping the investment practices referring to transnational real estate. Taking the given data into consideration, it seems viable to conclude that immigrant entrepreneurship is more evolved in Australia than its native and Indigenous counterparts. Australian start-ups could learn some lessons from Chinese immigrants and employ their successful strategies in practice to enhance the country’s entrepreneurial sphere.

Social Entrepreneurship in Australia

An important dimension of the Australian business sphere is social entrepreneurship, which involves the development of business solutions and approaches used to operate with cultural, social, and environmental aspects. As Gerrard (2018) notes, the integrated concern for environmental and social issues enabled social enterprises to become a prominent political and public reaction to unmanageable dilemmas. Unlike in the general Indigenous business sector of Australia, social Indigenous entrepreneurship is developed at a comparatively higher level. Research by Logue et al. (2017) indicates that Indigenous communities can be rather successful in promoting particular goods, such as native food. By offering unique products, social entrepreneurs successfully pursue several goals. Firstly, they gain profit from their work, which allows them to support themselves and their families and develop their business further. Secondly, they grow people’s awareness of traditional values pertaining to Australia. Thirdly, such entrepreneurs popularise the ideas of protecting the environment by using natural products and reducing the environmental footprint.

Taking a deeper look at social entrepreneurship in Australia, scholars identify the close relationship between this entity and social enterprise scholarship. Douglas (2015) notes that the two concepts can be applied in various cases to reach different environmental and social purposes. Hybridity between social enterprise and entrepreneurship can be traced in their mutual commitment to business and social functions (Douglas 2015). Although such organizations function with beneficial aims, they are frequently viewed as inappropriate and illegitimate by the public. Despite performing commercial market activities, social enterprises do not generate any visible wealth and cannot take commercial loans due to the lack of legitimacy. Hence, the sphere of such entrepreneurship in Australia requires further development.

One of the viable approaches to solving the problem is finding appropriate financing. Impact investment is regarded as a successful approach to this problem due to its potential to deliver not only financial but also impact returns (Castellas, Ormiston & Findlay 2018). Research findings indicate that the role of impact investment is currently growing in Australia. Capital providers are important stakeholders in the promotion of social entrepreneurship in the country. Thus, the social entrepreneurial branch has a high potential in Australia, which makes it a viable opportunity for entrepreneurs.

How does Australia Compare with Other Nations?

To evaluate the level at which Australia’s entrepreneurship is developed, it is helpful to analyze the country’s rates with other nations. Since Australia has a close relationship with the Asia Pacific region, it seems viable to contrast Australia to Hong Kong SAR. The two countries have quite disparate indicators of entrepreneurial development. Even though Hong Kong may remain behind Australia in some ratings, the former has more prospective strategies of progress in general.

One of the most reputable ways of defining any country’s entrepreneurial potential is its place in the Global Entrepreneurial and Development Index (GEDI). The pillars of the GEDI include opportunity perception, start-up skills, risk acceptance, networking, cultural support, opportunity start-up, technology absorption, human capital, competition, product and process innovation, high growth, internationalization, and risk capital (Ács et al. 2018). According to the 2018 GEDI, which incorporates countries’ entrepreneurial attitudes, abilities, and aspirations, Australia occupies fifth place with a score of 75.5, and Hong Kong holds the thirteenth place with a score of 67.3 (Ács et al. 2018). However, though there is a large disparity between the countries’ positions, it is interesting to take a look at their indicators separately.

Entrepreneurial attitude scores are 79.2 in Australia and 69.4 in Hong Kong. Entrepreneurial abilities rates are 76.0 in Australia and 62.5 in Hong Kong (Ács et al. 2018). These numbers signify a prevalent position of Australia in comparison to Hong Kong. However, the last indicator, entrepreneurial aspirations, is 71.2 in Australia and 70.2 in Hong Kong (Ács et al. 2018). These numbers demonstrate that Hong Kong is striving to succeed, and it is likely to improve its indicators in other categories if Australia keeps slowing down its dynamics in entrepreneurship.

Another significant indicator of countries’ entrepreneurial progress may be traced with the help of the Global Competitiveness Index (GCI). As of 2018, Hong Kong occupied seventh place in the GCI rating with an overall score of 82, and Australia held fourteenth place with a score of 79 (Schwab 2018). Both countries scored 100 in macro-economic stability and had almost the same score in the health sector of the human capital group: 100 in Hong Kong and 99 in Australia. Hong Kong had better indicators than Australia in infrastructure (94 as compared to Australia’s 78), ICT adoption (88 versus 73), and financial system (90 versus 86) (Australia: global competitiveness index 2018; Hong Kong: global competitiveness index 2018). These numbers offered by the GCI demonstrate that Hong Kong is more dynamic than Australia in a series of important economic aspects.

The PESTLE analysis of both countries allows further understanding of the core reasons why Hong Kong and Australia keep their entrepreneurship levels as they are. Australia has a powerful business environment, but the latter is damaged by growing regulation in the professional services sphere (Country profile series: Australia 2018). Australia’s increasing rate of unemployment is defined as one of its major challenges. Thus, the country needs to improve its entrepreneurship environment in order to create more jobs.

Meanwhile, the economy of Hong Kong has a strong structure, but it is challenged by a considerable reliance on external trade (Country profile series: Hong Kong 2017). At the same time, Hong Kong’s entrepreneurs have more possibilities than Australia’s ones due to low tax compliance. However, because family businesses are so popular in the country, corporate governance is restricted. Another challenge is the dependence on external trade, which undermines Hong Kong’s ability to operate all of its functions successfully.

There are indications of Hong Kong’s growing success in such spheres of entrepreneurship as inter-organizational and multinational. In their research on the Li & Fung Group, one of the most progressive Hong Kong enterprises, Yu and Kwan (2015) note that by employing the most progressive business approaches, Hong Kong was able to become Asia’s most dynamic hub of knowledge. Barnes et al. (2015) report that to a great extent, Hong Kong’s success in international entrepreneurship is contingent on interpersonal communication, including such dimensions as trust, personal credibility, personal communication, and affection. Since it has been established that Hong Kong managed to build strong entrepreneurial connections with Australia, it seems relevant to suggest that the latter could employ similar strategies to enhance its business relations as well.

A crucial benefit in Hong Kong’s entrepreneurial development is presented with the country’s information technology services (ITS). As Hu, Sharif, and Baark (2014) remark, Hong Kong promotes high-tech services because it views its development as a unique opportunity to improve its economics. Meanwhile, Australia pays insufficient attention to the enhancement of ITS. Because of the reluctance of Australian entrepreneurs to spend time and resources on additional training, the rate of unemployment increases dramatically (Holtgrewe 2014). Therefore, both countries’ attitude toward ITS development has a strong impact on their entrepreneurial possibilities.

Finally, when comparing Australia to Hong Kong as a representative of Asian nations, it is necessary to mention the accommodation of immigrants from Asian countries in Australia. Immigrant businesspersons are known to have a strong effect on many countries’ economies (Vandor & Franke 2018). In many countries, the likelihood of immigrants’ becoming entrepreneurs is much higher than that of native citizens’. It is relevant to say that the case of Australia and Hong Kong refers to this statement.

Immigrants from Asia living in Australia and other countries are more active and eager to succeed than people for whom these states are natives (Vissak & Zhang 2014). The most popular types of businesses for Chinese in Australia include co-ethnic business, high value-added co-ethnic business, computer accessory business, and business with low entry barriers (Wang & Warn 2018b). There is no evidence of Australia trying to compete with immigrants in these spheres or its attempts to enter other countries’ markets. Therefore, Hong Kong’s efforts in entrepreneurship are much more intensive than Australia’s. Such a state of affairs indicates a threat not only to Australia’s competitiveness at a global level but also to the country’s entrepreneurship on its own land posed by immigrants.

Why Should We Care and What Can We Do?

There are several reasons why the issue of entrepreneurship in Australia should be regarded more seriously. First of all, the country’s economy will improve if more new businesses open. Secondly, it will become possible to reduce the unemployment rate. Thirdly, there will arise an opportunity to eliminate entrepreneurial failures. Failures in business affairs are reported to have a strong negative effect on entrepreneurs’ feelings of loss and the need for recovery (Jenkins & McKelvie 2016). Although learning from one’s mistakes is generally accepted as an opportunity for future growth, many entrepreneurs are likely to refrain from making attempts to restore their business. However, as Boso et al. (2019) note, having experienced an entrepreneurial failure does not necessarily have to affect new ventures. Thus, scholars conclude that business failures can help entrepreneurs to evolve new capabilities that later help them to arrange a new business successfully.

The problem of failure and the fear of it is one of the most crucial topics of current academic research. Cacciotti et al. (2016) note that the effect of entrepreneurial failure is twofold. On the one hand, it may restrict one’s further endeavors. On the other hand, such a mistake can serve as a stimulus for improving one’s entrepreneurial behavior and as a motivation to succeed. These facts indicate that Australian entrepreneurs should not be afraid to fail and should not let their mistakes impede their progress. According to Cacciotti et al. (2016), problems and errors have the potential to increase the level of self-efficacy, passion, and optimism. Hence, it is necessary to promote the desire to become involved in business among the country’s citizens and explain to them that even if they fail, they do not automatically become losers.

In the process of managing failures and their aftermath, it is crucial to provide the correct conceptualization of this issue. Jenkins and McKelvie (2016) suggest that failure may be conceptualized at two different levels (individual and organizational) and from two perspectives (subjective and objective). Objective company-level description of a failure involves the drop in revenue to the point when the organization becomes bankrupt and cannot attract new funding. Subjective firm-level failure refers to the business owner’s ability to evaluate performance directly at the time of exit (Jenkins & McKelvie 2016). Objective individual-level failure is conceptualized by means of assessing the returns to human capital in other possible employment opportunities. Subjective individual-level criteria of failure involve the impact on individual employees. The mentioned conceptualizations allow for a better analysis of entrepreneurial failure.

Failure is not only a complicated aspect of any entrepreneurial endeavor but also a multiform phenomenon. To understand the issue of failure better, it is necessary to address the variety of failure configurations. Khelil (2016) singles out three approaches to typifying failure: determinist, voluntarist, and emotive. The determinist view is based on the connection between a failure and its impact on the new venture (endurance or discontinuation). The voluntarist approach is contingent on the dependence of the new venture’s resources on the failure. Finally, the emotive way considers that a failure can influence the entrepreneur’s ambition and encouragement (Khelil 2016). It is evident that each of these failure types can have a positive or a negative effect on the future of one’s entrepreneurial career. To minimize the risk of one’s discontinuation, it is important to instruct entrepreneurs that to err is human and that they can learn vital lessons from their failures.

Apart from economic complications arising from failures, there is also a risk of social disadvantages. When an entrepreneur fails, he or she may feel socially excluded (Lane, Mallett & Wapshott 2019). Shepherd and Patzelt (2015) investigate the link between entrepreneurship and health, and they note that both the physical and mental health of individuals may be affected by problems in business. Therefore, it is necessary not only to pay more attention to entrepreneurship in Australia but also to the mitigation of possible failures and their harmful outcomes.

Discussion

The issue analyzed in the paper is the level of entrepreneurship development in Australia. This issue presents a problem since the current rate of entrepreneurship in the country is rather low, which has a negative impact on various spheres. The paper addressed the question by outlining the extent to which Australia’s entrepreneurship is evolved, comparing it to Hong Kong’s level, and explaining why the issue deserves consideration and what its possible implications may be. In the first part of the paper, such subtopics as entrepreneurship in Australia, opportunities existing for Indigenous and immigrant businesspersons, and social entrepreneurship are discussed. The extensive use of scholarly sources and statistical data enabled a thorough investigation of the identified problem.

The key thesis of the paper is that Australia should improve its entrepreneurial efforts in order to gain better economic indicators and make the lives of its people more convenient and profitable. Currently, the rate of unemployment in the country is too high. Comparison to Hong Kong allowed concluding that Australia is developed worse than this Asian country at many different economic and social factors.

The addressed issue has significant implications for scholars, policymakers, and entrepreneurs. Scholars might conduct research on the low level of entrepreneurism in Australia and the high level in neighboring countries. That way, it will become possible to improve Australia’s interest in this sphere and promote it in the country. Policymakers might be interested in this issue since by issuing evidence-informed policies, they will encourage and sustain entrepreneurialism in Australia. Finally, entrepreneurs might benefit from the current research since they will learn about the most effective strategies for business development. Also, businesspersons will be informed on the possible effect of failures and the ways of dealing with them.

Analyzing the problem of the lack of Australians’ interest in entrepreneurialism is not an easy task. However, it is crucial to draw the attention of policymakers, researchers, entrepreneurs, and the government to this matter. By promoting the evolvement of various business endeavors in the country, it will be possible to gain many positive economic and social changes. The most important of these would be the reduction of the unemployment level, which is not possible at present due to the fear of new companies entering the market. The investigation of the core reasons why Australia’s indicators are much lower than those of other countries represented in world ratings will allow singling out effective approaches to managing them. Without the development of entrepreneurship, no country can count on the prosperous lives of its citizens, no matter what advantageous geographic location it has or what touristic attractions it can boast. Therefore, it is strongly recommended that Australia should alter its existing practices and turn to more effective and efficient ones.

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