Why does this matter? Well, there is a growing realisation entrepreneurship matters. Why? Because job creation is fast becoming a major priority the world over. And policy makers know that entrepreneurs create jobs.
The US has always seen entrepreneurship as an important economic tool for creating jobs and developing commercial opportunities. But the further hollowing out of America’s middle class through the last recession was a powerful reminder entrepreneurship and job creation are key government policies.
And recently, China's finance minister, Lou Jiwei, said the nation should focus on job creation rather than hitting the official economic growth target of 7.5 per cent, signalling there may be a significant shift in focus. The National Development and Reform Commission say the government will, this year, provide incentives to industries and companies that create jobs.
The Australian Government rightly is starting to seriously focus on small business. And they should because there are certainly a lot of them making a very valuable contribution to the economy. They are also always and with good reason described as the engine room of growth and the job creators.
But are small businesses the big job creators?
Australian Bureau of Statistics figures show that of the 2.13 million actively trading companies, the majority employ no staff. Of the 835,187 that do employ staff, most of these are micro businesses with between 1-4 people that will always stay micro due to lack of opportunity, skill or the desire not to grow.
While medium and large businesses create the other half of the nation's jobs, many of those companies - and there are only 84,000 of them - are downsizing, merging, outsourcing and off shoring[?].
So who are the super job creators? Where should our stretched resources be allocated if we want to focus on super charging job creation?
At the recent World Economic Forum, new research was presented that may result in a complete rethinking of this issue.
According to the Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies report released by StanfordUniversity, the top one per cent of companies from a surveyed 380,000 companies reviewed across 10 countries, contributed 40 per cent of total jobs.
But consider this: the top five per cent of companies contributed 67 per cent of total jobs. That is, a small number of high impact entrepreneurs create most of the new jobs.
Research from RMIT University, done in conjunction with business magazine BRW, gives some further insights. For more than 20 years, in-depth research of fast growing companies has also looked at the number of jobs they created. While not all super growth companies create large numbers of jobs - WhatsApp that sold recently to Facebook for $19 billion only had 55 employees - the majority do.
So what did the super job creators have in common? Not a lot! These companies came from different industries, were of different size and came from different geographic locations. They weren't necessarily in the hot growth industries - although a significant number were. They weren't in industry clusters. They had just sprung up, seemingly overnight and begun to create hundreds if not thousands of jobs a year. And these high impact entrepreneurs actually create a “jobs ecosystem”, creating work for many freelancers, contractors and suppliers.
It makes you think. Traditionally industry policy around the world is focused on small business, creating clusters, trying to replicate successful hubs like Silicon Valley and backing a specific industry. But the evidence suggests a far more effective strategy is studying the elite few in their own eco system to get better insights into the economic, social and political factors which create the conditions for success.
So where does that leave Australia? Obviously we need to take the first step which is to reclaim the word entrepreneurship. Maybe governments still feel the word is associated with the fallen corporate raiders of the late 80s and early 90s.
There is both the opportunity and need for Governments to be looking into this new world of entrepreneurship and talking proudly of the role entrepreneurs play in business and society. We should develop entrepreneurship strategy and policy and not just small business policy. And we should start to research and celebrate their contribution to job creation.
Yes, we need to cut red tape, develop infrastructure, build in productivity reforms, invest in education and skills. But we also need to focus on creating ambassadors of growth, innovation and job creation and change our cultural attitude to these tall poppies. Our children should see entrepreneurship as a mainstream career, one that makes an invaluable contribution to society and not a choice made by mavericks solely for their own self enrichment.
It’s a conversation I want to start and in the coming weeks I’ll be sharing with you my views on how we can kick start entrepreneurship in Australia. Let me know what you think.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.