Aussie small businesses falling behind on digital transformation

by Mike Wood24 Mar 2021

CPA Australia has released damning figures that show how Australian small businesses lag behind the rest of the APAC region when it comes to digital transformation.

According to their Asia-Pacific Small Business Survey, Aussie SMEs were the least likely to use social media for businesses, to invest in tech, to begin or increase online sales during the pandemic or to review their cyber-security protocols.

CPA Australia spoke to over 4,000 businesses across 11 markets in the APAC region to get a handle on their responses to the pandemic, their plans for the future and their level of technological innovation.

“Small businesses in Asia are much more likely to undertake activities associated with growth,” said Gavan Ord, CPA Australia’s small business expert. “The investments they’re making in e-commerce, new payment technologies and social media are paying dividends.”

“But it’s not just what’s happening at a business level that’s important. A number of Asia-Pacific governments have committed large amounts of public funding to help their small businesses go digital. Australia’s investment in digital transformation has been very modest by comparison. Aussie small businesses need more help that they’re getting to leave the digital dark ages behind.”

With JobKeeper set to end in the coming week, SME policy is high up the legislative agenda in Canberra.

“We’re calling on the government make a significant commitment to improving the digital capability of small businesses in the Federal Budget,” said Ord. “If Australian small businesses don’t transform, sales will go to more innovative competitors overseas. This will damage Australia’s international competitiveness and delay our economic recovery. It’s in the public interest that small businesses are supported with digital transformation so they can continue to create jobs and sustain our economy.”

“2020 was a tough year for small business the world over. Most businesses in our Asia-Pacific survey reported that COVID-19 had a major impact on them. Due to COVID-19, connecting with customers on social media, selling online and offering digital payment technologies became an important source of sales and customer satisfaction for many small businesses. Businesses that grew strongly in 2020 were more likely to do this well. This trend is here to stay. Businesses that can’t bridge the digital divide will lose sales to more innovative competitors.”

For those in the broking industry who deal with SMEs, encouraging their clients to adopt digital transformation is vital to ensuring that they can get the best deals on financing.

“Service design and delivery will become increasingly data driven and technology enabled,” said Ord. “Clients that don’t have a sufficient handle on technology or online presence will be digitally disenfranchised. They may find it increasingly difficult to access external financing, especially from digitally-focused emerging lenders. They may also find it increasingly difficult to enter new markets, reach potential customers and access government services and support. If they don’t take action now, it’s unlikely they’ll be able to catch up later. Businesses that receive professional advice are more likely to succeed when it comes to digital transformation and reap the benefits.”