Home topics workplace managing-blogs Managing Managing What Aussie small businesses really need to be competitive Marcus Moufarrige April 16, 2012 Small business in Australia finds itself in a perplexing situation. On the one hand – thanks to technological developments such as the cloud – start-up costs are low and the potential for small players to disrupt established markets has never been higher. But on the other, thanks to labour market regulation and a high dollar, operating costs are very high, making it incredibly difficult to scale up. High costs Indeed, a recent KPMG study has found that, after Japan, Australia is the world’s most expensive place to do business. The highest electricity prices of any major economy (40 percent higher than Japan’s) coupled with high wages are biting, and a strong dollar is keeping costs on the up. For SMEs especially, the effects are hard felt. For one, they can’t take advantage of economies of scale in the same way that big business can. For another, they have less ability to pass high costs onto consumers, with price hikes a harrowing move for SMEs at the best of times. Many SMEs are, in short, precariously poised – and the problems posed by a two-speed economy don’t help. Long term light Thankfully, the long term outlook is bright. Firstly, Australian SMEs are superbly placed to take advantage of the new Asian economies. ‘Going global’ is not as difficult as many imagine, with today’s cloud and virtual office technologies putting multinational-type resources