Entrepreneurship & Productivity: Practical Levers for Australia’s Small Business Hubs

01/05/2026

Australia’s small businesses are the backbone of local economies, driving jobs and growth in every corner of the country. In recent years, outer metro suburbs have emerged as hotspots for new business formation, with strong year-on-year growth in both numbers and turnover. Yet, many of these businesses aren’t scaling as quickly as their inner-city counterparts.

The reasons are clear. While proximity to commercial hubs and access to skilled labour help fuel entrepreneurship, barriers like limited digital connectivity and gaps in practical training can hold back growth. Visa’s Business & Economic Insights research¹ shows that targeted investments in infrastructure and skills could transform these regions into the country’s next big engines for productivity.

The services sector is where small businesses truly shine. In fields like restaurants, retail, and professional services, small firms make up half the revenue and more than 80% of the businesses. Their success is built on local relationships and specialised offerings that larger companies struggle to replicate. Supporting these firms with digital tools and easier market access means bigger wins for local economies and communities.

E-commerce adoption among Australian small businesses is strong, but there’s untapped potential in cross-border trade. Compared to peers in Thailand and Hong Kong, local firms lag behind in reaching international customers. With the right support for digital skills and cross-border commerce, more businesses could expand beyond borders and boost Australia’s productivity.

For policymakers, the opportunity is to invest in digital infrastructure, practical training, and market access. By helping small businesses overcome barriers and seize new opportunities, we can build stronger communities and a more resilient economy.

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¹ "Entrepreneurship and productivity in Australia’s small businesses" (Visa, 2025)

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