Side by Side, Businesses Big and Small Grow Together

Herald Sun

Katie Lahey

Chief Executive, Business Council of Australia

We hear a lot about the differences and tensions between large and small business but this is only part of the story.

In reality, businesses of different sizes are deeply interdependent. We contribute to each other’s success and play complementary roles in keeping Australia’s economy strong.

Which is why, over the past decade, large and small businesses have prospered almost precisely in parallel with each other.

In pursuing policy to keep our economy strong and resilient, it is important to understand how different parts of it fit together and serve each other’s, and the national, interest.

For example, a significant proportion of business conducted by large and small enterprises comes from their transactions with the other – a total of about $474 billion each year.

Eighteen per cent of small businesses and 22 per cent of large businesses identify the other as their main source of income.
Sure, there’s friction and competition in the business sector but it’s not the full story.

A new paper released yesterday by the Business Council of Australia provides a different perspective by outlining the shared experiences of large and small enterprises in Australia, the extent of business they do with one another, and the complementary roles they play in strengthening our economy overall.

The paper draws on case studies to illustrate, for example, that the presence of big department stores and smaller specialty stores in a shopping centre attracts customers to both.

The growing services industry is dominated by small businesses that are best able to meet changing community needs.

The demands from large business for highly specialised and technical knowledge rely on small business being able to make this kind of contribution.

Small, regional businesses also make the most significant contribution in agriculture, with large businesses in the retail and food processing areas dependent upon their production.

When it comes to utilities industries like electricity, large businesses have the capacity to invest in infrastructure covering vast areas. Businesses in all sectors, including small businesses, rely on it.

Given the vast common ground that exists between large and small businesses in Australia, it’s hardly surprising that we are calling for many of the same policy improvements, including better infrastructure, access to skilled staff and less red tape.

What this means is that if governments worked on the basis of what businesses of different sizes have in common and what we agree on, rather than fixating on our differences, we could get on with meaningful policy improvements.

Businesses do not grow in isolation. Australia’s economic strength reflects a story of businesses of all sizes competing and striving to become better and more profitable. In doing so, businesses can grow side by side and through their interaction with each other and the community.

The success of businesses of different sizes that service our nation’s varying needs contributes to a stronger economy and greater community prosperity for all Australians.

To ensure our future, we need to support all businesses to compete fairly, to interact and, most importantly, to fulfil their potential.

This requires governments to provide good management through policy reform, and to recognise, support and explain the common gound between different, equally important parts of the Australian economy.