Small business dominates computer services industry

Small business dominates computer services industry

Australia's $836 million computer services industry is dominated by small businesses, according to the latest figures released from the Australian Bureau of Statistics.

More than 14,700 businesses were operating in the industry at the end of June 1999 - a 52 per cent increase in three years with an annual growth rate of 15 per cent, according to the ABS.

Small business represents nearly all computer services in the country, with 98 per cent of businesses employing fewer than 20 people. The industry generated $10.4 billion during 1998/99.

The most profitable segments were bundled computer services which earned $3.3 billion, non-bundled customised software services and solutions with earning of $2.5 billion and computer processing services which earned $1.1 billion.

According to the ABS figures, the industry has an operating profit margin of 8.2 per cent. Surprisingly, this is a significant increase on the 1995/96 figure of 5.7 per cent.

Most industry income was generated in New South Wales and Victoria. The two states account for 78 per cent of the total industry income.

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