Aussie small businesses engage less with digital technology

Australian small businesses were the third least likely to offer customers the choice of digital payment technologies

Australian small businesses are less likely to invest in, use, earn from or offer customers the use of digital technologies than their Asia-Pacific counterparts, according to CPA Australia.

CPA Australia surveyed 4,227 businesses in 11 markets about their operations and plans.

Moreover, Australian small businesses were the second least likely to earn revenue from online sales and third least likely to offer customers the choice of digital payment technologies.

CPA Australia Chief Executive Officer Andrew Hunter labelled the results disappointing, saying; Other markets made major in-roads on digital transformation during the pandemic. Clearly, Australian small businesses need more help than they’re getting to leave the digital dark ages behind.

Unsurprisingly, most businesses in the region reported that the pandemic had a major impact on their business. However, the consequences appear to have been felt slightly more strongly in Australia.

Only 22.3 per cent of Australian small businesses grew last year – the second lowest result of any market surveyed. Only 8.3 per cent of Australian small businesses added employees – the lowest result.

Despite the impact of pandemic, 36.1 per cent of Australian small businesses reported they made no “major change” in response to the pandemic, the highest result of any market surveyed. For example, they did not access government support, negotiate rent reductions or loan holidays, delay taxation payments or reduce capital expenditure.

Given that many Australian small businesses overlooked these relatively simple actions, it is unsurprising that more complex digital transformation did not occur. However, the consequences are profound.

Hunter said that there is a clear link between innovation and performance. Our survey shows that growing businesses are more likely to use new technologies, e-commerce and social media. These are areas in which Australian small businesses performed poorly.

This digital divide will make Australia’s road to economic recovery longer and tougher than it needs to be. If Australian small businesses don’t transform, sales will go to more innovative competitors overseas, he said.

Australian small businesses expect to fare better in 2021, however, they may still underperform other Asia-Pacific businesses. Only 41.4 per cent of Australian small businesses expect to grow this year compared with the survey average of 60.8 per cent. Thirteen per cent expect to increase employees numbers, compared with the survey average of 35 per cent.

Failure to innovate is likely to continue to hold Australian businesses back. Only 6.7 per cent of Australian small businesses say they will introduce a product, process or service that is unique to their market or the world in 2021, compared with 23 per cent in other markets.

Hunter urged the government to show greater support for digital transformation. He said: While businesses should play an active role in digital transformation, the government needs to play a bigger role in helping businesses manage this change.

He said: Ad hoc financial support for digital transformation isn’t sufficient. There needs to be a significant commitment of public funding to help Australian small businesses transform.