Eight instalments of Rising Stars offer plenty of data to analyse.
The team at Business News sees the Rising Stars awards as a snapshot of Western Australian industry at the emerging level, beyond start-ups but before they have bulked up.All must show considerable growth in recent years.
No surprises, then, to find companies servicing the resources sector have dominated this space, representing 50 per cent of the overall winners and 22 per cent of the top 10 since the awards kicked off in 2006, around the time the mining boom was gaining real momentum.
Many of the names from engineering and construction (22 per cent of Rising Stars and 25 per cent of overall winners) could also have been thrown into resources services or vice versa. For example 2011 winner Velocious straddled both – it engineered and manufactured equipment that helped oil and gas companies manage their complex offshore operations. But many of those bespoke solutions became products that were available from a catalogue, albeit in boutique form.
What is clear to me is the dominance at this level of resources-linked companies. In this ecosystem, the growth of the mining and LNG development simply accelerated a lot of small business start-ups to another level.
That doesn't mean players in other sectors didn't grow, however they were outperformed. Of course we also know that resources companies paid so much above the odds for employees and services that many other sectors were squeezed out when competing for their own staff.
Retail, hospitality and personal services may not have won the race in terms of growth, but there's plenty of evidence that some parts have done well.
For example, Perth's bars and restaurants have exploded in number, to the point where chefs are back on the federal government's hit list for preferred immigration.
Whether that growth is sustainable, only time will tell. The slowing mining sector will affect everyone across the board, because the money filtered down from direct services to indirect ones.
Another reason we see less retail, hospitality and personal services businesses is because they often lack rapid scalability when compared with resources services companies, which have geared up for project-based work and are often the sum of many human parts rather than premises and capital equipment.
Property and financial services are also indirect players in the resources boom.
High salaries and a growing population have generated plenty of opportunities in these fields. In some cases, high-growth companies that have won Rising Stars transcend both.
Again, it will be interesting to see if this is sustainable as the rapid growth from the resources construction boom wanes.
In the end, we all want a well-rounded economy. The resources sector offers a solid and sustainable foundation for WA and many sectors that live off that would thrive in any successful economy. Information and communications technology, marketing, human resources and legal services might have a specialisation that leans towards resources in this state, but every economy needs these types of businesses.
We all might wish this was Silicon Valley, but you can bet that that very successful tech hub stills needs law firms and HR agencies. While many of those will be overweight in tech expertise, plenty will exist just to serve the plain old vanilla issues of any successful economy – legal practices specialising in family law and recruitment agencies focused on caterers.
When I look at this tapestry of Rising Stars winners I am comfortable that we've done well to nurture local companies that have exploited the boom successfully.
