It’s time to incentivise businesses to drive digitalisation deeper into their operations and create a new future for themselves, writes Marcus McNamara, Head of APAC, Sana Commerce.
Australian businesses are now in full recovery mode. Confidence is up, and investment intentions are “at or above-average levels”. Strategic planning horizons are being extended back beyond the immediate term, with a renewed focus on the country’s long-term prosperity and growth.
The Committee for Economic Development of Australia (CEDA) thinktank believes it’s time to focus government policy in ways that can “lift innovation, productivity and prosperity”.
Technology has a key role to play in that.
“Australian businesses should be supported to leverage the benefits of technology and with emerging technologies designed, developed and used in the public interest,” CEDA said, adding that “better utilisation of data and digital tools across the whole project life cycle” could “unlock greater productivity in delivery.”
The manufacturing sector also has a key role to play in the recovery. There is backing from across the political spectrum for the rejuvenation of Australia’s manufacturing sector, with a view to the country playing a greater role in supply chains that serve domestic and international customer bases.
Budget 2022-23 is an opportunity to combine some of these areas to create a force multiplier effect for the economy.
A manufacturing sector that is enabled by digital technology and supported by a strong and integrated supply chain connecting it to buyers (wherever those buyers happen to be) would serve as a key point of difference that encourages product sourcing from Australian suppliers and sellers.
The drive to local
Businesses reliant on global supply chains to procure and receive goods have had a challenging couple of years. Shipping costs have soared, product sourcing life cycles and timeframes have blown out, and the lack of integration between all the different players that make up the end-to-end supply chain combined to make for a challenging operating environment.
Targeted measures in Budget 2022-23 and built upon further in the election lead-up offer a real opportunity to make domestic manufacture and sourcing of products an attractive alternative.
Broad encouragement of digital technologies like B2B e-commerce can support this by making it easier to transact with Australian manufacturers, wholesalers and distributors – directly connecting these parties to buyer communities and exposing data collected through all interconnections in their respective supply chains.
This would allow buyers to plan supply and demand more accurately and ensure that productivity benefits flow evenly throughout the economy.
Income-producing asset incentive
The single biggest thing the Government could do for business this year is to offer a tax incentive or allowance to invest in income-producing assets. The idea would be to spur businesses across sectors to become more efficient and technology-enabled.
Many businesses and sectors have made solid starts on digital transformation, but there is so much additional opportunity in this space that could be unlocked with some targeted assistance.
Businesses are still yet to tap into the full spectrum of opportunities that digital and B2B technology provides. Now is the time to encourage that second round of digitalisation, embedding technology more deeply into operations, and creating new channels to grow revenue and underpin new business models and ways of work. As the investment would be limited to income-producing assets, this could act as an effective way to stimulate the economy.
Leverage the digital backbone
With the National Broadband Network (NBN) complete, the focus is rightly on deriving more value from this digital backbone. Many businesses use the NBN for their core communications between operational sites, but this is just scratching the surface of the opportunity.
The real opportunity is to encourage more innovative, entrepreneurial and market-leading developments that can only be enabled now that the network is in place.
Encouraging more manufacturers, wholesalers, and distributors to embrace B2B e-commerce and transact online would support the Government’s aim to increase business usage of Australia’s national broadband backbone. Buyers now want full-blown omnichannel experiences: they want your product, but they also want greater transparency with more information, possibilities, and better options.
Improved connectivity across the multi-modal supply chain is another possible use case, which would enable better end-to-end visibility of goods in transit.
Regional entrepreneurial support
There’s a huge opportunity in Budget 2022-23 to incentivise the growth of online businesses and e-commerce in support of demographic changes. We’ve seen a regionalisation of Australia’s population in the past couple of years. This has created a geographic spread of specialist skills outside major capital cities.
The opportunity is in ensuring those skills are properly monetised, and one of the ways to do that would be to incentivise more people to stand up e-commerce capabilities to sell their skills or products they make with those skills to a domestic and international audience.
Budget 2022-23 is firmly future-focused. It’s an opportunity for the Government to make a statement on the critical importance of a digitally-enabled business sector to take Australia into the next period of growth and prosperity.
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