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Western Sydney has emerged as the state’s most dynamic entrepreneurial hub and is on track to have more businesses that employ staff than eastern Sydney within 15 years.
Almost 23,000 employing businesses were added in the western suburbs between 2017 and 2025, compared with just over 10,000 across the eastern region of Sydney, analysis by peak body Business NSW shows.
Blacktown council area stood out for entrepreneurship between 2017 and 2025, with a 17 per cent increase in businesses that employ others (after adjusting for population growth).
Canterbury Bankstown had the next-fastest growth in that period (up 13.5 per cent), followed by Hawkesbury (13.2 per cent) and Fairfield (13.1 per cent).
On current trends, western Sydney will have more businesses that employ staff than eastern Sydney by 2041, the analysis showed.
A new report by Business NSW, which examines the future of entrepreneurship in the state, said recent infrastructure investments in western Sydney, along with its relatively young population, increasing industrial diversity and rising skills levels, had underpinned business growth in the region.
Api Yuganathan, co-founder of HealthcareLink, a specialist online recruitment platform, has witnessed the dynamism of western Sydney’s business culture first hand.
Her company, which employs 15 people, is based at a start-up hub in North Parramatta that supports small and medium-sized firms to develop and access new opportunities.
“People with new business ideas come in and use this space all the time,” she said.
“It’s been inspiring to see the ideas people are bringing forward, and the innovative solutions smaller companies are developing, to address real-world challenges. People here in western Sydney are running with a huge variety of business opportunities.”
Business NSW president Joseph Carrozzi said the growth of entrepreneurial activity in western Sydney pointed to a fundamental shift in the way Sydney is evolving.
“Western Sydney is emerging as one of the most important economies in the country, thanks to the entrepreneurial spirit of local people,” he said.
In Sydney’s east, business creation hotspots included the Bayside local government area, which includes Kingsford Smith airport, with a 12.7 per cent rise in employing businesses between 2017 and 2025. Randwick council also stood out as a centre of business growth (up 11.1 per cent) apparently driven by its new light rail connection, along with major health and research institutions in the area.
The Sydney City and North Sydney councils – which take in the traditional central business district and North Sydney job hubs – have the city’s highest density of businesses relative to population, followed by Willoughby, Woollahra and Hawkesbury.
The Business NSW report, which coincides with the peak body’s 200th anniversary, found that while business creation is strong in NSW, too few are making the leap from being a business of one to becoming an employer of others.
In 2000, 8 per cent of NSW’s workforce owned and managed a business with employees. Today it is less than 5 per cent – the lowest level in at least 35 years.
“If that 8 per cent rate of entrepreneurship still held today, NSW would have an extra 135,000 entrepreneurs potentially running employment-generating businesses,” said the report, which was done in collaboration with Sydney University Business School.
The trend is more significant among women, who were already less likely than men to run an employment-generating business. For men, the share of employing business owners compared with all employees peaked at 10.6 per cent in 2001 and declined to 6.7 per cent by early 2026.
The share of women in the workforce who own employing businesses peaked at 6.4 per cent in late 2001 but had fallen to 2.7 per cent by early 2026. This means the share of women in the workforce who own employing businesses fell by 56.9 per cent from its 2001 peak, compared with a 36.6 per cent decline for men – a gap of 20.3 percentage points.
Yuganathan, who established her company in 2013, said women sometimes find it difficult to access the support they need to expand their businesses.
“It’s not that women lack great ideas for start-ups,” she said. “But in the early stages, access to funding and finding the right mentors can be tricky.”
The report found the proportion of new businesses that take on employees within their first year of operation has declined from 35 per cent in 2011 to 27 per cent in 2025.
Carrozzi said NSW has a “missing middle” of small businesses that fail to scale into becoming medium ones, leaving our state worse off.
“This is an economic issue which must be addressed,” he said.
The report found regional areas are disproportionately affected by the decline in entrepreneurship, with some towns “even facing net declines in business counts over the past decade”.
It calls for a “future entrepreneurs strategy” to make it easier for business start-ups to generate employment.
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Matt Wade is a senior economics writer at The Sydney Morning Herald.Connect via X or email.From our partners
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