Time shows shift in business growth

High-growth companies highlight the change in WA’s economy.

A couple of weeks ago we welcomed our 12th group of Rising Stars winners, high-growth private companies that we believe are the next wave of successful bigger players in our economy.

While the individual stories are great, there is also something interesting in the broader sectors the winners represent – especially when you look at it historically.

We have run the Rising Stars awards since 2003, so the trends that become visible are notable given the time involved.

To me the shift is distinctive, especially from the early years we ran this award series when Western Australia’s economy was pre-boom, much more insular and much less industrial. Back then, marketing and financial services firms dominated the awards, but technology was also on display.

These fields have a degree of crossover with other sectors I’ve highlighted here; for instance, property and financial services categories are interwoven in many instances.

In another example, ICT is a form of technology but I have separated them because I think innovation online is very different from more physical developments. Similarly, resources and industrial services often overlap with engineering/construction categories.

A lot of companies, too, have similar footprints. You have to stop somewhere but I found it challenging to place several of this year’s winners in a particular box. Where does protective glove designer and manufacturer Performance on Hand fit?

I expanded the resources services category to include industrial services to incorporate this company more fully. Similarly, International Maritime Services, which delivers vessels such as high-speed ferries and tugs, cut across both the resources and industrial sectors.

What about Funky Monkey Bars? It seems unfair to place this innovative children’s play equipment designer and manufacturer in the retail/hospitality/personal services category, but that was the most logical place to land it. This is a typical of usual food groups and other more consumer-focused winners, which enjoyed strong returns when the average Western Australian was unconcerned about the prices they were paying at the checkout.

The graphic shows the rise of resources and industrial services as well as engineering/construction over this period, very much reflecting the boom period – including a dip during the GFC. Perhaps most surprising is the lingering growth in those fields despite the downturn. It will be fascinating to see if a company such as TAMS Group can maintain its impressive growth, given its strong focus on resources and its overall size.

Throughout the period, the property category has grown to somewhat fill the decline in straight financial services winners. Both have diminished in years gone by reflecting, possibly, more investor caution as the bust approached.