Future opportunities for Victorian small business

September 2015

- Mr Mark Stone - If small business can adapt to an evolving economic and technological landscape, it has the potential to emerge as a formidable sector by 2025.

Technology is impacting how we do business with more and more business taking place online. Videoconferencing and other tools are making communication easier, while social media is playing a larger role in business networking. However, none of these innovations can replace the face to face communication, information sharing and networking that is facilitated by business events.

There will always be a need for businesses to make new connections, rekindle old ones, learn from each other, share experiences and hear from leaders in their fields. There are fundamental benefits in people getting together and interacting that cannot be replicated online. The face to face connections that are made at business events can lay the groundwork for strong working and business relationships which can grow over time. 

I’m very pleased to have been asked to contribute to this newsletter as the Victorian Employers Chamber of Commerce and Industry has been a strong and consistent advocate for the business events sector in Victoria.

We argued strongly for the expansion of the Melbourne Convention and Exhibition Centre and were pleased to see it funded in the Victorian Government’s 2015-16 budget. Without this investment, Victoria would have risked having to turn away a significant number of potential new events due to capacity constraints. The expansion of the centre is a significant growth opportunity for the sector and a move that will cement Victoria’s reputation as an international destination for business events.

An expanded business events sector presents particular opportunities for Victorian small businesses to both participate in events and provide goods and services to the influx of visitors to the state that are associated with major events.

As Victoria’s leading business organisation, VECCI informs and services more than 15,000 members, customers and clients across the state, encompassing all industry sectors and spanning small, medium and large-sized businesses.

Reflecting the make-up of the economy, many of our members are small businesses. Small businesses with less than 20 employees make up 98 per cent of Victorian businesses. Though they may be small in size, small businesses are big on ideas, entrepreneurship and innovation. Taken together, they are major employers and key drivers of economic activity, investment and trade.

Small businesses are not just big businesses on a smaller scale. The nature of their operations and the way they interact with governments, consumers and other businesses means they face unique challenges in growing their operations and workforces. 

The potential for growth

VECCI’s recently released Small Business Taskforce report outlines a number of key areas that must be a priority for governments to keep small business competitive and create jobs. These include: addressing critical workplace relations constraints; supporting the skills growth of small business owners and their workforces; lowering small business direct and indirect costs; getting more small businesses into exporting; encouraging innovation and entrepreneurship; and improving access to competitively priced finance.

The report recommends specific actions such as raising the Victorian payroll tax threshold from $550,000 to $850,000, committing funding to secure Victoria’s international engagement strategy, and increasing the proportion of graduates with science, technology engineering and maths (STEM) qualifications.

VECCI has sought a commitment from governments at all levels to make small business a priority by implementing the reports’ recommendations.

In terms of future growth areas for small business, the Victorian Government has identified six priority sectors that have potential for extraordinary economic growth and the capacity to create high-skill, high wage jobs over the next decade. These are:

  • Medical technologies and pharmaceuticals.
  • New energy technologies.
  • Food and fibre.
  • Transport, defence and construction technologies.
  • International education.
  • Professional services.

They are areas where Victoria has many comparative advantages compared to other states and overseas.  These advantages include a highly skilled workforce and world class education sector, a diverse industry base, vibrant cities and regions and strong transport links. 

With competitive strengths in entrepreneurship, energy, skills and experience, Victorian small businesses are well placed to leverage significant opportunities in these sectors leading up to 2025.

However, in order to take advantage of the opportunities, business and government will need to continue to work together to address the constraints that small businesses face, creating the conditions for sustained jobs growth and prosperity. Doing so will give small business the best chance to grow their workforces, continue to innovate and achieve further success at home and abroad.