A recent business survey conducted by CPA Australia has found that the Australian small business sector is lagging behind that of its peers in other Asia Pacific nations. The 13th annual Asia-Pacific small business survey collected data from 11 economies and found that despite the sluggish performance recorded by businesses in 2021 due to pandemic challenges, there was hope that 2022 would prove more profitable.
The survey established that though 2021 was a stronger year for Australian small businesses than 2020, they still performed poorly in terms of growth. Just a third (33.2%) of small businesses recorded growth, while a similar proportion, 32.2%, shrank. Many businesses however seemed hopeful of the future with 53.1% expecting growth in 2022. This was however still less than the survey average of 61.9%.
This poorer outlook is being linked to disappointing uptake and investment in the digital economy. More specifically, innovation, e-commerce, social media and exporting. The survey found that a sizable 44.7% of Australian small businesses did not earn any revenues from online sales, compared to just 19% of the survey average. 36.7% of the businesses also confirmed not using social media for business purposes against a survey average of 17.2%. This placed Australia as the second most likely economy not to use social media for business purposes.
Australian small businesses were also found to be lagging when it came to investment in technology, with 35.1% having not made any investment in 2021, compared to just 4% in India. They were also found to be performing poorly when it came to offering customers digital payment options like ApplePay, with 39.4% not offering these options compared to only 0.1% of mainland Chinese small businesses.
CPA Australia also noted another area of concern being cybersecurity. The survey indicated that just 35.3% of Australian small businesses had reviewed their cybersecurity protections in the last six months, compared to the survey average of 46.7%. 18.4% of these businesses believed there was a risk of a cyber-attack in 2022. The low investment in technology has been partly attributed to poor short term returns as 23.5% of Australian small businesses report improved profitability from this investment.
Gavan Ord, senior manager of business policy at CPA Australia is urging the government to offer better digital support and incentive programs for small businesses. He said that there were many ways to help small businesses improve their digital adoption and that other nations had proven willing to support this substantial investment. He encouraged the major political parties to make a greater commitment to small business digital transformation that would drive Australia’s future prosperity.
This adds to earlier calls for the government to provide more incentives for small businesses to access business advice and digitise. Accounting professionals have also been noted as having a key role to play in advising businesses on digital transformation and in the execution of associated legal documentation.
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