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.”
The research, based on in-depth interviews with more than 100 Chinese-born founders of Australian small and medium sized enterprises, revealed that the group started their businesses at a young age, with 45 percent below 40 years old and 26 percent in their 40s. It found that 71 percent first came to Australia to study, and over half had previous employment experience in Australia before they started their own business.
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.
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, and the average age for the founders of these particular companies was just 27 years old.
Hans Hendrischke, co-author of the report and Professor of Chinese and Business Management at the University of Sydney Business School, said: “Building a business from the ground up takes great tenacity, which Australian-Chinese entrepreneurs have proved to have in spades. Our report reflects the success of these young and creative entrepreneurs, who told us that much of their progress is down to a deep understanding of both the Chinese and Australian markets.”
The majority of entrepreneurs 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 significant number (14 percent) brought innovative technologies from China to their business operations or customers that were previously unavailable in the Australian market.
The report found that COVID-19 was having a significant impact on the Chinese-Australian entrepreneurs surveyed, with just under half of the companies’ turnover from January to March 2020 falling by over 30 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, more than half of the 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 six months after the epidemic ends.
Dr Wei Li, from the University of Sydney Business School and 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 set 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.”
The report is based on 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.
Declaration: The researchers received no funding and no conflicts of interest were declared.