The rate of business insolvency, relative to the total number of companies in Australia, has more than doubled over the past 15 years, reflecting an increase in the risks involved in running a business.A study of the insolvency market by economist Chris Nadarajah, commissioned by chartered accountants Jones Partners, found there was a business insolvency rate of about 1.5 per cent of total businesses in the 1999/2000 financial year. By 2012/13 the proportion had increased to 3.4 per cent.Presenting the results of the study at a seminar in Sydney yesterday, Nadarajah said companies employing fewer than 20 people accounted for 80 per cent of business insolvencies. Nadarajah said the figures indicated that the SME sector had become more risky over the past 15 years."The barriers to entering business are lower and more people are having a crack. This reflects the fact that we have more contractors and sole traders in the workforce," he said.CommSec economist Craig James, who was on a panel with Nadarajah discussing the report, said another factor was that Australia had not had a recession for 22 years and a lot of people starting businesses in recent years had no experience of the downside of business and did not take adequate protection against risk.Another panelist, IBISWorld chairman Phil Ruthven, said the nature of small business had changed. "There are two types of SMEs - the old inherited businesses and new age SMEs," he said.The characteristics of "new age" SMEs include new types of intellectual property, new technology and involvement in new industry sectors - all of which involve greater risk exposure.Nadarajah said the causes of business failure were the same as ever: poor management; inadequate cash flow or high cash use; and trading losses.