Young, innovative and connected: meet the new Australian Chinese entrepreneurs
Meet the new Australian Chinese entrepreneurs
Chinese Australian entrepreneurs start companies at a young age, are highly likely to have been educated at Australian universities and act as a bridge between the Chinese and Australian economies, according to new research from KPMG Australia and The University of Sydney.
- First research of its kind into Australian Chinese entrepreneurs and their business models
- Australian Chinese entrepreneurs act as a bridge between business communities at home and abroad
- High proportion of companies are high-growth businesses, even though most started with limited capital
- Business owners remain optimistic despite impact of COVID-19
Believed to be the first report of its kind into Chinese-born entrepreneurs who have founded businesses in Australia, The New Chinese Australia Entrepreneurs aims to demystify this vibrant, but little known sector within the economy and provide insight into the new generation of Chinese Australian entrepreneurs.
Doug Ferguson, KPMG’s Head of Asia & International Markets commented: “To date, an understanding of medium sized Australian businesses led by younger Chinese entrepreneurs has been limited. This report changes that. Our research has uncovered a large number of very successful businesses started and led by Chinese Australian entrepreneurs, who were born in China but largely educated in Australian tertiary education institutions and shaped by Australia’s commercial landscape. Their companies, from all industry sectors across Australia, contribute important economic benefits, bring diversity of thinking, innovation and growth to the Australian business landscape and offer an important bridge between Australia and China.”
Young and Innovative
Despite launching with limited capital (with just 11 percent reporting they had over $500,000 in startup capital) 68 of the businesses were classified as high growth enterprises, with compound annual growth above 20 percent. The average age for the founders of these particular companies was just 27 years old. The great majority (80 percent) were engaged in some form of innovation in their business. These included bringing new products and services to the market, business model innovation, changes to management and operations, or technology upgrades. A number (14 percent) bring innovative technologies from China to their business operations or customers that were previously unavailable in the Australian market.
Bridging Business Communities
Ethnic community ties also play an essential role in the business operations of these companies, with three quarters (75 percent) of respondents collaborating with companies with a Chinese background in Australia, and working together to gain local market access and supply of products, services and capital. One in three Chinese Australian entrepreneurs use ethnic business networks to access clients, markets and distribution channels, and one in four turn to ethnic business networks to source products, services and technology.
In contrast with many Australian-born SME founders, the Chinese Australian entrepreneurs do not expect to hand down the business to other family members, or even employ family members. Only 14 entrepreneurs out of 100 said they would hope to have their children take over the business in the future.
Optimistic for post COVID rebound
The report found that COVID-19 was having a significant impact on the Chinese Australian SMEs surveyed, with 46 percent of their companies’ turnover from January to March 2020 falling by over 30 percent, and 14 percent falling by over 50 percent. Despite this, they are trying to retain their employees with 57 percent not laying off any staff, and 25 percent cutting working hours and salaries to preserve jobs.
Post COVID-19, 55 percent of respondents believe it will take around one to two years for economic activity to return to previous levels, and about a third of the respondents said they believe that economic activity will resume in six months after the epidemic ends.
Dr Wei Li from the University of Sydney Business School, co-author of the report, said: “While the impacts of COVID-19 have affected them in the short and mid-term, the optimism we find in this survey has reinforced the impression that many Chinese Australian entrepreneurs have a unique set of characteristics and qualities that sets them apart from other organisations.”
“Chinese Australian entrepreneurs can be great partners and facilitators of Australian businesses looking to enter the Chinese market – they understand the two cultures and their different ways of doing business. They have a long-term commitment to their Australian business and to their role in the Australian community and economy. This new generation of Chinese Australian entrepreneurs is a valuable part of our local business fabric and contributes significant economic and social benefits to Australia,” she concluded.
About this report
The report is based on a qualitative study of 100 Chinese Australian entrepreneurs identified through consultation with local Chinese Chambers of Commerce and the leaders of local Chinese business and industry associations who routinely engage with migrant entrepreneurs. From November 2019 through to January 2020, in-depth face-to-face and telephone Interviews were conducted. To capture some of the initial impacts the COVID-19 pandemic has had on these businesses, follow-up interviews were conducted in April with 56 of the 100 business executives.
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