Poor digital literacy plaguing small business competitiveness

The Internet is the greatest tool available to any business, but the majority of Aussie business owners still don’t know how to make the most of it.

Australian Bureau of Statistics data shows the SMB community (fewer than 200 staff) comprises some 99% of all businesses in Australia. It also employs 65% of the workforce – or 2.8 million people.

In purely economic terms, small business contributes approximately 20% of Australia’s gross domestic product (GDP).

What’s shocking then, is that 35% of all SMBs have reported a decrease in profitability in recent years.

Research from PayPal Australia indicates that the low levels of digital literacy plaguing the sector could be a significant factor behind the problem.

The brand new findings released by PayPal this week in its Digital Literacy Among Small Business in Australia reveal:

  • 3 in 5 SME owners stated that low levels of digital literacy are preventing them from running their businesses more efficiently;
  • 79 per cent said they need more help and guidance to embrace the digital economy;
  • Only half (51%) have actively tried to improve their digital literacy

The key finding to emerge was the majority of SMBs do not utilise digital and mobile technologies to grow their business – and the reason is that they don’t know how.

Disturbingly, only a third (34%) list their contact details online. Despite the prevalence of digital advertising, only one in five (22%) say they advertise online and less than one in 10 (8%) are using cloud software solutions for their business.

Only 14 per cent of SMEs feel they are taking advantage of everything the Internet has to offer small businesses, and yet 65 per cent agree that conducting business online is vital for growth. While a third of PayPal Australia’s payment volume is currently conducted on a mobile phone, less than half (43%) said they access the Internet for business purposes using a smartphone and even less use a tablet (23%).

Where to from here? Education the key

  • Among Australian SMEs that have tried to improve their digital literacy, the most common methods are through independent learning tools – such as online search (65%) and online tutorials (49%);
  • Australian SMEs claims the most effective method to increase their own levels of digital literacy would be a fully funded training course, followed by access to a website with small business advice;
  • 30% want to improve their knowledge of developing a web site presence, 1 in 4 want to learn how to utilise cloud-based solutions and 1 in 5 (19%) want to learn more about accepting payments through their website.

Related Stories