New businesses may be growing in NSW but 135,000 fewer of them are employing staff, a new report states.
The Future Entrepreneurs report was produced by Business NSW with help from the University of Sydney Business School.
It found that the number of NSW business owners who employed staff had fallen from about 8% around 2000 to less than 5% today.
Business NSW CEO Daniel Hunter said: “NSW isn’t short of entrepreneurs. What we’re short of is entrepreneurs taking on that first employee.
“Those missing 135,000 employing businesses represent jobs that were never created, opportunities that never opened up and investment that never happened.”
The number of new businesses in NSW grew by 22% from 2016–17 and 2024-25 but sole traders grew by 27% compared to 15% growth in businesses with staff.
NEW BUSINESSES MEANS LESS JOB CREATION
The proportion of new businesses employing staff in their first year also fell, from about 35% in 2011 to 27% in 2025, the research says.
“Businesses less than five years old create about 60% of all new jobs,” Hunter says.
“Every major employer started with someone making that first hire. If fewer businesses take that leap, we’re shrinking the pool of potential job creators.”
The number of female entrepreneurs fell by 57% since 2001 while those aged under 35 years halved over the past decade.
Almost half of baby boomer business owners plan to retire within five years, the research also says.
“If fewer young people and women are becoming employers; that should set off alarm bells about who will create the next generation of jobs,” Hunter says.
The report argues that NSW’s entrepreneurial system doesn’t fail at a single point or for a single reason but for multiple reasons which is prompting Business NSW to call for a strategy to develop future entrepreneurs.
“NSW should be the natural home of Australia’s entrepreneurs but our entrepreneurial culture is being stifled right when we need it most,” Hunter says.
“We need to make NSW a place where someone can start on their own and see a realistic path to employing five, 10 or 50 people.”
Formerly the NSW Business Chamber, Business NSW has represented businesses in NSW since 1826; click here to learn more about them.
