As the 2022 Federal Budget approaches, Vista Australia CEO Marcus Marchant shares insights into why Australia needs a digital-led small business recovery.
It’s no secret small businesses are the lifeblood of the Australian economy. It’s also no secret many struggled to stay afloat during the pandemic. Despite being touted as the key to our economic recovery in 2022, many SMEs are still doing it tough, with relief not coming fast enough and business fatigue at its highest.
Vista’s Small Business Recovery Report found six in 10 (60 per cent) Australian small business owners dipped into savings, 50 per cent cut back on groceries and one in five (18 per cent) borrowed money from a friend or family member to survive.
What most couldn’t do was something that would make their business resilient and sustainable. Build digital skills.
Read more: “Budget 2022: It’s now time to focus on SMEs“
Digital or bust
Consumer behaviour changed during the pandemic – and there is no going back. SMEs now operate in a world where digital is not only essential but the preferred channel of many customers.
Digitisation is key to success, yet SMEs remain digital laggards. The Organisation for Economic Co-operation and Development (OECD) report The Digital Transformation of SMEs identified the digital skills gap as one of the greatest barriers to SME digital adoption. Size and resource constraints are key reasons stopping SMEs from going digital. That lack of digital know-how makes SMEs less productive, sustainable, and resilient.
Vista’s research found one in three (32 per cent) Australian small business owners struggle with marketing, and one in five struggle with IT, website, and digital services (18 per cent).
In a spin on the well-known ‘give a man a fish and you feed him for a day’, we need to teach small businesses to fish in new waters by digitising to sustain them for life.
One-off cash injections are stop-gap measures and not a long-term solution. The government needs to prioritise scalable strategies that fast-track learnings so small businesses can learn how to attract and retain customers in the digital realm.
The OECD says government can play an important role in reducing the SME digital skills gap by providing financial and tax incentives for SMEs to undertake training. Stronger links and cooperation between private and public sectors and higher education providers are needed to facilitate initiatives like business accelerator programs.
Governments in Latin American countries and the Inter-American Development Bank are co-financing coding boot camps to meet demand from local communities, especially young people and entrepreneurs.
In a similar vein, Vista launched ‘99 Days of Design’ to empower small businesses with financial support and refreshed design identities to build and grow their brand and business through digital design.
Government support for Australia’s small businesses could extend to a voucher system similar to those introduced to stimulate spending to support hospitality, entertainment, and tourism providers during the pandemic. A digital skills voucher for small businesses could go towards training in digital marketing or investment in digital products.
Encouraging emerging entrepreneurs
It’s not only about investing in digital skills. Investment in incentives to encourage emerging entrepreneurs and start-ups – particularly digitally savvy younger generations – is also top of small business owners’ priorities for the pending budget.
Most government pandemic support was aimed at keeping jobs, not incentivising entrepreneurs to create them. COVID was a time for survival. Now is the time to reward innovation. More Government support for creators would go a long way to rebuilding the aspirational innovation pipeline.
It’s another area where public and private sectors have a role to play, through incubators and hubs. That’s why Vista has teamed with the world’s largest funding marketplace for women-owned businesses, IFundWomen, to launch ‘ReferHer’, to connect women with resources, funding and coaching at co-working spaces globally, including One Roof in Melbourne.
Opportunity is born from adversity. The biggest opportunity for Australia’s small businesses is a digital-led recovery.
The question is how. Let’s see if the Budget gives some answers.
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