Australia has fared better than most nations during the COVID-19 pandemic, but it continues to be a challenging operating environment for many small businesses. We’ve recently seen state government impose five-day lockdowns in Western Australia and Victoria.
It’s the unpredictability that hurts most. Melbourne florists and restaurants that stocked up for a busy Valentine’s Day were suddenly left stranded, with expensive flowers and food going to waste. It’s stressful to manage and difficult to accept.
We also have to acknowledge the difficulties facing governments. It’s easy for people to criticise them for taking these snap lockdown decisions, but they have to put public health considerations first. They recognise the hardship these decisions impose on small businesses, and we’ve seen them offering hardship grants to businesses in affected areas.
But one year into the pandemic, it’s increasingly clear that the real opportunity lies in more carefully targeting financial support to maximise effectiveness. Hardship grants help ease the short-term pain, but there will be more bills to pay next month and next year. Next time there’s a snap lockdown, small businesses will be in the same situation.
A tailored response
The need to be more tailored in responding to economic challenges has been one of the most important learnings for governments around the world during the COVID-19 pandemic. As much as one-off contributions to power bills or rent relief are welcomed by small businesses, they don’t have any long-term impact.
We need to see more mutual partnerships where governments reward small businesses that take active steps to help themselves. Businesses that take those steps will emerge from the pandemic stronger than ever for having been through the experience.
This is why governments around the world are looking to help small businesses adopt digital tools and practices. The US Small Business Administration has tripled funding for its State Trade Expansion Program (STEP) in response to the pandemic, helping small businesses to reach international customers by globalising their websites.
A little closer to home, Singapore has introduced a Digital Resilience Bonus that provides additional government support as small businesses develop digital capability. This offers food services and retail businesses up to $10,000 for adopting a range of digital tools and processes including accounting and payroll, inventory management and ordering, online shopfronts, online food delivery, and data analytics.
We’re seeing similar initiatives here in Australia. Victoria has introduced a Small Business Digital Adaptation Program, offering a rebate of up to $1,200 for those who implement digital technologies. These include everything from business management tools to website upgrades. Small businesses that register for the program are given a list of digital services, such as Intuit QuickBooks Cash Flow Planner, and can start free trials for a month. If they choose to subscribe, they receive a subsidy.
The Global Innovation Forum found that the COVID-19 pandemic has accelerated the adoption of technologies that enable remote work and communication. Technology providers have witnessed years’ worth of digital transformations in months, including the dramatic increase in adoption of digital conferencing, collaboration, productivity and storage platforms.
This demonstrates that digital tools are no longer complements to productive work environments – they are essential. Although this transformation has been evident in the corporate world, small businesses have been slower to adopt digital solutions. This crucial shift towards digitalisation is an area that state governments should focus on as a priority. With the JobKeeper Payment extension ending shortly, programs such as the Victorian digital rebate are a more sustainable way to help set small businesses up for long-term success.
Initiatives like this are designed to help businesses that want to help themselves, encouraging them to seek digital support in the areas where they need it the most such as cash flow planning, real-time overviews and machine learning predictions.