NSW's Future Entrepreneurs

Business NSW exists to support businesses and the people who run them: entrepreneurs. It is why we have chosen to mark our 200-year anniversary by writing this paper on the future of entrepreneurship in New South Wales. 

For 200 years, NSW has been shaped by people who saw opportunity where others saw uncertainty. They built businesses, created jobs, strengthened communities and helped make our state one of the most prosperous places in the world.  

The question at the heart of this paper is whether we are creating the conditions for the next generation to do the same. 

Research by Business NSW and the University of Sydney Business School finds that rates of entrepreneurship are declining. In 2000, 8% of NSW's workforce was people who owned and managed a business with employees. Today it is less than 5%.  

If that 8% rate of entrepreneurship still held today, NSW could have an extra 135,000 businesses with employees.

This matters to all of us

We have written this paper because we want NSW to reignite its entrepreneurial spirit. As we look to the future, we worry about the state’s economy drifting into complacent mediocrity, becoming less dynamic, less productive, less prosperous and less resilient. That would be a bad result for all of us.  

Can NSW stay on its current path and avoid this future? We don’t think so, and we don’t want to find out. 

Towards NSW’s entrepreneurial future 

This paper contributes to solutions by developing a simple model of the paths entrepreneurs follow in NSW and the outcomes they reach, tracing from before they start their business, to starting it, to growing it, to reaching maturity, and finally to exit. We call this the ‘entrepreneurial lifecycle’ and it allows us to identify where NSW’s entrepreneurial system lets down its entrepreneurs. It also shows us what needs to change. 

Our analysis shows that NSW’s entrepreneurial system does not fail at a single point or for a single reason, there are many reasons. Equally there is no single change we can make to reverse the decline in entrepreneurship, we need to do many things, systematically, for a long time. 

This is why we are calling on the NSW Government to lead a state-wide mission for NSW to become the best place in Australia to start and scale any business.  

This mission must be more than a slogan. Real change requires a coordinated and comprehensive effort to fundamentally redesign the experience of starting and growing an employment-generating business in NSW. 

We must also encourage more people to want to be entrepreneurs, and support them throughout their entrepreneurial journey. 

Over time, this mission should drive cultural change to embed an entrepreneurial mindset in NSW, resulting in a stronger economy and higher living standards.

The NSW Future Entrepreneurs Strategy 

The first step is for the NSW Government and the business community to co-develop a NSW Future Entrepreneurs Strategy setting out how this mission will be achieved. The Strategy should have three complementary objectives: 

1. Make it easier to run a business in NSW by lowering costs and reducing frictions  
2. Help businesses to succeed by coordinating a system of business support across the entrepreneurial lifecycle  
3. Make more people aspire to be entrepreneurs and give them the pathways, tools and networks they need to succeed. 

This paper provides further recommendations on what meaningful action would look like for these three objectives. 

This paper argues that entrepreneurship is in decline, but decline does not have to be NSW’s destiny.  

Download the full report to explore the evidence, insights and recommendations that could help shape the next generation of entrepreneurs and the next chapter of NSW's economic success story.