The small business sector has experienced tremendous growth in recent years, especially in countries of high internet and technological reach. People have easier access to finances, better opportunities, and more education. All of these factors have allowed the industry to flourish. However, it has flourished in different ways in different countries. Local laws, customer behaviour, historical business practices, and other factors have an impact on how small businesses function. Here’s a look at how the Australian small business sector compares to America and Europe.
American and Australian differences
On the surface, these two English-speaking countries appear quite similar. They’re former colonies, and primarily Anglo-Saxon or Caucasian. But that’s where similarities end. The American business world is influenced by a strong individualistic culture that emphasises on personal growth and hard work. The Australian business culture follows a “fair go for all” ethic, which is tamer and less focused on the individual. The small business sector laws also reflect these differences, offering different kinds of protections.
America has a more structured, rigid workplace environment. There are clearly-defined lines between superiors and subordinates and superstar or celebrity entrepreneurs will be surrounded by a team of hardworking, but less visible employees. Leadership roles are different in Australia when compared to America. Australia has a more casual attitude towards leadership, with executives interacting with employees easily. This lends a more relaxed workplace environment, though there is no compromise on productivity.
According to research, US has a lower start-up rate than Australia. Small businesses have a smaller impact on the overall economy than large, established industries. They also have lower employment generation, as many businesses are focused on individuals. Australia has a higher employment generation ratio, with business owners more likely to expand their company by adding employees.
US small businesses are often one-man shows with freelancers, automated systems, and consultants. Australia also has some of the highest start-ups per 1000 people, and that’s on par with the US. Around 12% US adults run businesses. That is similar to more than five individuals per 1,000 in Australia.
Australia and Europe differences
Australia and Europe both share thriving small business sectors. Over 90% of firms are small businesses, which has a big impact on the economy. The business environment is similar, with the Small Business Act for Europe governing this sector in Europe. All participating EU countries adhere to the principles of these regulations while crafting some of their own protections. Small businesses thrive in EU countries although their development hasn’t yet matched the US or Australia.
Australia has several commissions and government authorities providing ample support in different regions. All laws work to encourage entrepreneurship that generates more employment.
People in Europe are more likely to start a new business because they’re desperate and need to get away from their regular employment. This is particularly evident in countries like Spain, Germany, Ireland, Greece, and United Kingdom. While many entrepreneurs start businesses out of desperation in Australia, many are early-stage entrepreneurs as well.
European small businesses are also known to employ more people, especially in nations with lower internet or technology penetration. Unlike the US, these nations are more focused on the business community rather than individual entrepreneurial success. All policies reflect this trend, which means there are better protections in place for both entrepreneurs as well as employees. Employment creation is particularly high in countries like Slovak Republic, Spain, Portugal, Denmark, though it remains strong in most European countries. This is partly because of strong socialist influence in most regions.
There are a number of differences between US, Australia, and European small business sectors, but they have considerable influence over one another. As international trade grows, business interactions will change even on small business levels.
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About the Author
Ben Fewtrell is a sought-after Business Coach, Keynote Speaker and trainer who has featured in Virgin’s Inflight Magazine and Entertainment Portal, SKY Business and “Secrets of Top Business Builders Exposed”. He is also the host of the popular Business Brain Food Podcast where he interviews leading experts on anything and everything business.
