Meet Rebecca

Rebecca is 38 years old. She is married with two kids, a boy (four) and a girl (17). They live in a detached three-bedroom house in Toowoomba, with a $377 thousand mortgage and is on the brink of “housing stress”. She completed year 12 but did not pursue tertiary education, and now works 40 hour week in a sales job, earning just over $80,000 a year. Rebecca owns a 10-year old Toyota Corolla and has an android mobile phone. She is 5’4″ and weighs 71.1 kilograms.

Newspapers love to report stories like these — what various surveys tell us about the average Australian. In fact, the ABS will release an update on how Rebecca has changed since the last Census sometime this week. While obviously a bit silly and not intended to take too literally, caricatures like this do help to align our world view. Not everyone after all, is a 6’4” government economist.

When we it comes to industry and innovation policy, we only seem to talk about the Atlassians and the Arriums of the world; as if there’s nothing in between.

But of course, there is. About 2 million firms sit somewhere in the middle of these extremes — and very few of them look like a successful enterprise software company or a struggling steel mill.

The average Australian firm is a sole-trader (61 per cent) in the construction sector (17 per cent), based in Western Sydney (21 per cent). The firm isn’t a gazelle, and didn’t employ anyone extra last year (94 per cent). The business earned about $125 thousand in revenues (35 per cent), just like it did last year (76 per cent). The business has been trading for at least four years (57 per cent), and should still be operating next year (88 per cent).

If you’re running one of the 850 thousand firms that do employ, then you’ll still be in construction (11 per cent). You’ll be running an Australian owned (97 per cent) firm in Sydney CBD (18 per cent), with no more than four workers (70 per cent) on your payroll. You will be rather dependent (51 per cent) on a just small number (56 per cent) of local (82 per cent) consumers (47 per cent). Most of your inputs will be sourced from domestic (94 per cent) SMEs (58 per cent). You’ll face competition from at least five other competitors (63 per cent), which are roughly all the same size as you (50.9 per cent).

Last year, your profits went down (32 per cent). That however, shouldn’t come as a surprise, because you didn’t innovate (56 per cent), export (88 per cent), offer any new products (61 per cent) or improve your productivity (62 per cent).

This kind of analysis only takes us so far. It says nothing for instance, about the sectors that account for most production or employment, or which firms are driving productivity and innovation. Nor how we compare to other countries. Nor how much firms differ from the average. From a political economy perspective, there is also an important distinction between where Rebecca works, and Rebecca.

That said, it does provide an important point of reference as we look to “facilitate competitive market places”, “reduce business costs”, “work with industry to support businesses”, “build the capability (including digital) necessary to achieve profitable and sustainable futures”, and otherwise “create a conducive and highly effective operating environment for Australian businesses”.