The NBN may be positioning itself as powering the growth of Australian entrepreneurialism but it offers little proof that its network has been a major driver to date.
The Government-backed network builder commissioned KPMG demographer Bernard Salt to map out entrepreneurial “belts” across Australia, and the types of entrepreneurs found clustered in them.
Salt's report - in NBN's words - “explores how access to fast broadband and digitally-disruptive technologies have prompted the emergence of new entrepreneurial tribes which are driving a shift away from big businesses.”
“… The expansion of the NBN network is improving connectivity to even the most remote parts of Australia, creating a culture of entrepreneurialism and innovation outside our metro cities,” the report claims.
“The extraordinary rise of new small and especially of new micro businesses is being driven by a number of factors.
“In some cases new technology including new software has the capacity to support an entirely new business entity. In other cases business growth in traditional sectors such as construction, retail, agriculture, health and professional services is being facilitated by new technology such as for example cloud computing.
“The rollout of the NBN network is an enabler of access to new technology.”
However, the report offers little to no proof that current levels of entrepreneurialism can be attributed in any measurable way to increased NBN access.
Instead, it offers only a generic assertion that the “fluidity and mobility” and “immediate level of responsiveness” that small and micro businesses need to offer customers “can only be delivered by seamless broadband connectivity and access to technology tools.”
At a macro level, NBN access isn’t mentioned at all as a driver for people to go into business for themselves.
“Over the 12 months to June 2015 the Australian economy generated 17,200 new small business entities employing less than five workers. This is the equivalent of 330 new small businesses per week,” Salt said in his report.
“This raises the question of what is driving small and micro business growth in Australia? Digital disruption and globalisation combined with the end of the mining boom do indeed appear to be displacing workers who may be reinventing themselves as one-man-band consultants or contractors.
“This trend towards the formation of more small businesses might also be being driven by the ageing of the population with baby boomer employees resigning and reinventing themselves as consultants and contractors.
“This would explain the surge in professional services businesses and perhaps also growth in the number of new health-based businesses.”
It’s worth noting that in the 12 months to June 2015, NBN brought 276,000 home and business users onto its network (it does not break out how many are business users). It had a total of 486,000 active users at that time.
In that same period – based on ABS statistics in the report – sole traders grew by 3700 and SMEs employing 1-4 people grew by 13,500 (the report does not break out growth of SMEs employing 5-19 workers or above).
So it is feasible that NBN’s active connections could support this level of business growth, or more.
However, no correlation exists between these two datasets, making it difficult to extrapolate the specific effect of NBN’s presence on the growth of the small and micro business sector.
In any event, the report also offers a disclaimer that while small and micro businesses are growing fast, the impact of larger businesses on the economy should not be under-estimated.
“As a nation we are moving away from larger small businesses and even away from medium-sized and big business entities,” the report states.
“Employment growth has continued but the business entities capturing this growth are changing. More small and micro businesses; fewer medium-sized and big businesses.
“[But] this is not to say that employment in medium and big businesses isn’t expanding. A static or even a fewer number of medium-sized and big businesses can employ more people from one year to the next.”
Assuming it hits its build targets to 2020, NBN will inevitably play a role in powering a proportion of Australian businesses
But for now it remains difficult to say exactly how many of Australia’s entrepreneurial ventures NBN can lay claim to.
The opinions expressed in this article are those of the author.