Welcome to our four-part series on workplaces of the future. This Information Age series will examine the positives and negatives of workplace trends in Australia, and how businesses and workers can adapt and thrive.
In Part 1, we looked at how tech roles now exist in practically every business.
In Part 2, we examined our changing work patterns and how remote working has become the new normal.
In Part 3, we look at the growing focus on mental health initiatives in the workplace.
In this final part of our Workplaces of the Future series, we look at the rise of entrepreneurship during the pandemic.
June last year marked a record for entrepreneurialism in Australia.
In that month, there was a record number of companies registered with the Australian Securities and Investment Commission (ASIC) in a single month, with almost 35,000 businesses created.
This marked the culmination in a boom in entrepreneurialism that was ignited by the COVID-19 pandemic. Fuelled by potentially losing their work, having significantly more spare time and a general re-evaluation of work’s place in our lives, many Australians have looked to start their own companies and be their own boss, whether as a side hustle or their main employment.
In the first six months of 2021, more than 150,000 companies were registered in Australia, up from 110,000 and 113,000 in the previous years respectively.
It’s in sharp contrast to what often happens during worldwide crises, with the number of businesses falling during the GFC and other major worldwide events of turmoil.
And these registrations might be translating into jobs too, with data from recruiter Seek showing that the month of May in 2022 saw the most job ads posted on the platform ever.
“Those opening small businesses amid the COVID-19 economic recovery are increasingly representing Australia’s diverse community, with more small businesses founded by young people, migrants and women,” the SEEK report found.
The COVID pandemic caused many to re-evaluate where work sits in their lives, BDO director of industrial and organisational psychology Scott Way said, and this may have turned some towards entrepreneurialism.
“COVID has given people time to reassess their priorities and what’s important to them, and how to split up days and time, and what’s important to them,” Way said.
“It has produced a significant change.”
A survey of 2,000 Australians last year conducted by NAB found that 4 in 10 people wanted to run their own business, and 9 per cent had already started their own company.
“It takes hard work and dedication to get a new business off the ground. With these businesses responsible for the employment of two out of every three Australians, it’s vital we all get behind them and encourage the next generation of entrepreneurs,” NAB small business executive Ana Marinkovic said in the report.
These statistics have been reflected in part around the world.
According to the OECD’s SME and Entrepreneurship Outlook 2022, there was a net increase of more than 17 percent in the number of companies created in the second half of 2020 compared to the previous year.
The report also found that bankruptcies were significantly lower in 2020, the first year of the COVID pandemic, than in 2019.
In the US in July 2020, the number of applications to start a new business hit an all-time high of more than 500,000, nearly twice as many as were registered in the same time in 2019.
By 2022, 5.1 million new business applications were filed, the second highest year on record, down only from the previous year.
This figure was still well above the 3.5 million figure in 2019, before the pandemic.
“Amid supply chain disruptions, threats from inflation, and concerns about a coming recession that plagued much of the economy, the steadiness in application levels exhibited over the course of 2022 offers optimism that the pandemic may have delivered a lasting, positive shock to American entrepreneurship,” US entrepreneurship experts Dr Robert Litan and Professor John C Haltiwanger said in a report.
France also saw a historical high in October with 84,000 new businesses created, a 20 per cent increase year-on-year.
Japan had 10,000 new businesses registered in September 2020, up 14 percent year-on-year, while the UK saw the number of registered companies jump by 30 percent year-on-year at the end of 2020.
The World Bank has also looked into business creation during the COVID pandemic. It found that there was a net increase in companies in just 42 percent of countries around the world, with a decrease seen across much of Europe and Central Asia.
But the report found that the majority of OECD countries with high income economies in 2020 had an increase in companies, due in large part to the financial support provided in these countries.
According to Australian Bureau of Statistics data, the 2021-22 financial year saw a 7 per cent increase in the number of overall businesses in the country, representing a 167,000 increase.
This was nearly twice as big an increase as in the 2020-21 financial year.
It’s clear that the COVID-19 pandemic has sparked an entrepreneurial boom that has not abated.
This has been seen in Australia, with record numbers of businesses registered and job ads posted online, a new startup culture that has emerged from a global crisis, and a re-evaluation of our approach to work.
The workplace of the future may well be one that we create ourselves.