Enough of the start-ups, gazelles will unleash South Australia’s prosperity
Globalisation is battering South Australia’s economy and taking too much business confidence with it.
The stark reality is that South Australia was once known as the 10 per cent state — our overall contribution to the national GDP and percentage of national population. Now we are at just over 6 per cent of GDP and make up 8 per cent of the population. In short, we are dragging the chain economically for the rest of Australia.
If we continue as we are, the fortunes of our economy will continually rise and fall on the back of global commodity prices and which way the wind blows for the Australian dollar.
From an employment perspective, the business community faces a choice. Do we want our children to be tourist guides, fruit pickers and truck drivers, or scientists, engineers and highly-trained professionals with global relevance?
The saviour for our economy could lie in a special breed of business known as a ‘gazelle,’ a term coined by international growth expert Verne Harnish. A gazelle is a scale-up, not a start-up, and this type of company became the focus for recovery in the UK according to a report delivered to the British government in November 2014. The report found a one percent increase in the population of scale-up companies in Britain would create 238,000 new jobs and contribute £38 billion ($75.7 billion) in gross value to the British economy.
South Australia, indeed Australia, needs to nurture and develop gazelles, and do so quickly. It will be these companies that lead the charge, not the big end of town, because scale-ups create new turf; large companies protect it.
A gazelle is an enterprise with at least 10 employees and average annual growth in employees or turnover of greater than 20 per cent over a three-year period. But a true gazelle goes deeper than just statistics. They have ambition, capability and market focus. South Australia needs gazelles to come to the fore and scale-up faster, taking on larger national and international markets with innovative solutions to solve globally relevant needs.
While it is terrific we make chocolate, beer and boots, these products beyond our shores lack punching power in a crowded global market. We need companies that develop, design and manufacture the machines, robotics, software, electronics and next generation technology that will vastly improve how chocolate, beer and boots (and many other things) are made globally. Three to five homegrown multinationals would have a real impact on the way the world makes things and make a big difference to our economy.
The problem is identifying our local gazelles. Not knowing who they are or how many we have, makes it difficult to provide the help they need to globalise rapidly. The Impact Awards aims to address this by engaging local business leaders and influencers. This industry-led group’s purpose is to identify local gazelles and help them to globalise faster by providing access to the personal contacts of successful business leaders, along with mentoring and advice.
Jana Mathews is one of 20 internationally recognised ambassadors for the Impact Awards. She has vast international experience with fast growth companies and economies.
“Only four per cent of all Australian businesses employ 20 or more staff, but they contribute 51 per cent of all employment,” Jana says. “So we don’t need to start more businesses. We need to grow more of the 96 per cent of our existing businesses.
“The 11 per cent of Australian companies employing five to 19 staff are the leverage point for the economy and for employment. We should focus on identifying and growing them.”
For the future of the South Australian economy, it is important to draw attention to companies with the potential to rapidly scale-up, and their leaders. Doing this will make it easier for them to act as role models to others, and find customers, partners and investors, both at home and overseas.