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Australia is home to about 2.7 million small businesses, with more than 440,000 new ventures started in 2024–25.
Now new analysis from the e61 Institute shows it’s the youngest firms, those five years old or less, that have the biggest impact on job creation, even though they typically begin with only two employees. Collectively, however, they make a major impact through agility and innovation.
Older small firms (5+ years, under 15 staff) generate far fewer new jobs and often have a net negative effect on job creation as they stabilise rather than scale, according to the analysis. While still important to local communities, they no longer fuel employment growth in the same way.
These findings highlight the need to support Australia’s pipeline of new enterprises by reducing barriers to entry, improving access to finance, streamlining regulation and fostering innovation. In a challenging economic climate, young businesses remain a critical driver of long-term job creation and resilience.
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