LONDON: Think innovation and leadership and it is hard to go past Elon Musk. The driver behind the Tesla electric vehicle has demonstrated that if you think big and do your research, nothing is impossible.
“If you’re trying to create a company, it’s like baking a cake. You have to have all the ingredients in the right proportion,” Musk has said.
In Tesla’s case, Musk was able to combine an idea (the electric vehicle) with inspirational leadership and the right business and community settings.
For no one is Musk’s cake analogy more apt than for leaders of WA’s small- to medium-sized businesses.
WA is home to about 6430 so-called SMEs, or 12.5 per cent of Australia’s total – which compares favourably to this State’s 10.5 per cent contribution to the country’s 24.5 million-strong population.
WA’s isolation is often cited as a key driver of business growth because it fosters – no, it demands – persistence, strength, intuition and initiative to survive.
It also opens opportunities because many of the traditional incumbents in other markets – on the east coast or overseas – don’t always make the trek to WA. So there is scope and opportunity for a local entrepreneur or businessperson to fill or service a gap in the market.
The biggest concentration of SMEs in WA is in accommodation and food services, followed by retail trade, construction, manufacturing, and professional, scientific and technical services.
But while WA is batting above our average in terms of SME numbers, we lag the nation in business confidence.
Based on the most recent Bankwest Future of Business survey, SMEs in WA are much less optimistic about the future than their peers across the nation.
On a scale of minus 100 — meaning strong negative sentiment – to plus 100, the national SME average sits at 11.3. Queensland is the positive outlier at 20.4 but WA is a laggard at minus 2.4.
These well-worn excuses apply:
• WA is still recovering from the hangover of the end of the China-fuelled, construction-heavy resources boom.
• Persistent commodity price weakness and the State’s massive debt burden are impeding business growth.
• WA consumer confidence remains low.
WA may be out of the worst in terms of business conditions, but the recovery will be gradual.
It is widely acknowledged that in the natural cycle of a business, WA is in the consolidation and productivity-enhancement phase; that is, squeezing more out of revenue at a time when market growth is subdued and profit margins are under pressure.
Innovation is not just about technology – though technology often plays a massive part – but about strategic thinking and adapting to change.