Business registrations data published by the ABS reveal Queensland has disproportionately fewer major private sector employers (with 200+ employees) than southern states. And the gap is particularly disproportionate in several sectors, including information media & telecommunications, professional, scientific & technical services, financial & insurance services, and retail & wholesale trade (see chart below). Overall, Queensland has around 610 businesses with 200+ employees, compared with over 1,500 in NSW and nearly 1,100 in Victoria. This disparity is much larger than can be explained by relative sizes of the economies: NSW’s economy is only around 75 percent larger and Victoria’s economy is only around 25 percent larger than Queensland’s.
Looking more closely at some specific industry sectors (see Charts on businesses with 200+ employees for selected industries), such as professional, scientific & technical services, I am disappointed Queensland appears to be massively under-performing across a range of sub-industries, including in one consistent with the aspirations of a Smart State, computer system design & related services.
Obviously, path dependence partly explains Queensland’s relative lack of major private sector employers. Many of Australia’s largest companies were originally established in southern states and Queensland historically was much less significant in the national economy than it is today. But the figures should be concerning to Queensland Government officials, nonetheless. To me, they suggest the need to stop wasting precious resources on luring craft breweries or Hollywood movie productions to Queensland. The state government should instead focus on keeping business regulation and taxes to a minimum, improving our education and training system, and inspiring more Queenslanders to become entrepreneurs.
For other analysis of the business counts data, see Nick Behrens’s latest post:
The Health of the Queensland Business Community (The Good and the Bad)
For my views on industry policy measures to be avoided see:
Comments on BrewDog being lured to Brisbane in the Broadsheet
N.B. For clarity, the data above relate to where businesses are registered. Many large businesses registered in NSW and Victoria will have employees in Queensland, but their head offices are likely to be in Sydney and Melbourne.
Interesting analysis Gene – I’d be keen to see how that trend shapes up even further across the regions.
Thanks Jann. Good suggestion. I’ll have a look at the data.
Btw, my session in Brisbane is now up on the CEDA website. Iâve posted it also on Troppo.
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From: Queensland Economy Watch Reply-To: Queensland Economy Watch Date: Thursday, 1 March 2018 at 8:54 am To: Subject: [New post] On Qldâs relative lack of big private sector employers
Gene Tunny posted: “Business registrations data published by the ABS reveal Queensland has disproportionately fewer major private sector employers (with 200+ employees) than southern states. And the gap is particularly disproportionate in several sectors, including informati”
Gene, isn’t this only part of the analysis? For example, if Queensland has relatively higher per capita proportions of small and medium business isn’t this a good thing? These businesses tend to be more dynamic, suggesting a more competitive business environment? Furthermore, why does everything have to be ‘big’ to be better? SMEs are the employers of the vast bulk of Australians.
Also, your NB: note is massively significant. Mapping government business data like this via GIS over the Brisbane CBD for example, used to yield massive gaps in business that you quite clearly knew were there. I know the ABR/ABS have taken significant steps in recent years to have all of a business’ ‘operating locations’ included but for locational purposes I found this data to be so inaccurate (businesses also use their accountant office (can be interstate) as their registered office or strange structuring where ABNs were used for tax purposes or the data just plain wrong, out of date or incomplete, you really need to be careful drawing ANY kind of conclusion from it.
Thanks Toby. Very good points. I’m unsure that SMEs employ the vast bulk of Australians though. I’ll try to crunch the data and post on that question soon.
Here is an interesting article on the topic at hand. Sadly for me it supports your view and not mine above. Still an interesting read: