The market economy is advancing at an astonishing speed in present-day society. Business, which is divided into large, medium and small business, has become a primary symbol of the development of market economy. Entrepreneurship is defined as "the process, brought about by individuals, of identifying new opportunities and converting them into marketable products or services"(Schaper and Volery 2007, 4), and it is often related to small business. This essay will argue that the level of entrepreneurship in Australia is higher, compared to other affluent nations. Then it will move on to explain what factors can motivate individuals to conduct entrepreneurial activities. Finally, it will outline that there is no significant evidence that small enterprises are beneficial to the economy.
It is difficult to estimate the level of entrepreneurship. However, it is a misconception that the number of entrepreneurs in Australia is lower than other developed countries. According to Autio (2007, 12), compared to other affluent nations, Australia and New Zealand have more entrepreneurs, and then North America. Entrepreneurship in Australia is at a higher level as a result of two aspects: innovation and start-up rate. There is no denying that innovation is a significant indicator, which can measure the level of entrepreneurship (Kukoc and Dominic 2008, 17). Australia is at the highest level of Early-Stage Entrepreneurial Activity (TEA) in terms of innovation economies. Interestingly, innovation activities in Australia are dominated by females, in the case of joining in entrepreneurial activity with an equal right (Kelley, Bosma and Amorós 2010, 9).
The other index of measuring the level of entrepreneurship is the incidence of start- up (Kukoc and Dominic 2008, 20).
As Rachel L. Parker (2006, 7), states:
One indicator of entrepreneurial activity is the level of start-up activity......This would indicate a strength in small firm start-ups in Australia. In Australia, more adults are engaged in the process of establishing a business than in Sweden, a key indicator of entrepreneurship.
More precisely, the incidence of start-up enterprises in Australia has accounted for 17 percent of all types of business, which is third among the selected Organisation for Economic Co-operation and Development (OECD) countries (Kukoc and Dominic 2008, 20). Therefore, the development of entrepreneurship in Australia surpasses its developed counterparts due to higher innovation and start-up rate.
There are one internal and one external factor which can encourage individuals to establish their own enterprises. Firstly, entrepreneurial activities can be responsible for external factors including governmental policy and institutional environment. It is evident that governmental policy can intervene in the economy, thereby controlling entrepreneurial activities. Parker (2006, 9) points out that governmental policy and institutional factors are more efficient in Australia,...