Aussie small firms unlikely to innovate

Australia’s small business sector not only lacks young people, recording the highest percentage of small business owners aged 50 plus across the Asia-Pacific region, but also is unlikely to innovate.

According to the new survey “Asia-Pacific Small Business Survey” from Australia’s professional accounting organisation, CPA Australia, the country ranked among the worst in the region when it comes to attracting young people into small business ownership and the association called for the Federal Government to launch a public inquiry into what was stopping young people from launching businesses.

“The survey results show that young business owners and founders are a necessary ingredient for Australia’s economic future, our digital capabilities and future innovations,” CPA Australia Senior Manager Business and Investment Policy, Gavan Ord, said.

“We need Australians of all ages running and owning small businesses. Diversity brings huge benefits to the economy. The absence of young people has long-term implications.”

Following this, Australian small businesses currently had a much lower level of digital capability than their Asia-Pacific peers and were among the least likely to innovate in 2023.

Almost a third (30.4%) of small businesses in Australia did not use social media, compared to the survey average of 15.4%.

Meanwhile, only 18.8% of Australian small businesses sought advice from technology consultants last year.

“A lack of innovation is a drag on economic growth and productivity that we will feel for years to come. Encouraging new talent to launch small businesses can boost long-term innovation,” Ord stated.

“The government needs to ensure running a small business is an attractive option for young people who can bring their digital skills to the sector.”

“The lack of digital know-how within Australian small businesses extends into cybersecurity. Only a quarter consider cyberattacks to be a possibility in 2023, compared to an Asia-Pacific average of almost half.

On the positive note, there were some signs for future growth as Australian businesses had their best year in five years in 2022, with 47.6% of small businesses growing.

According to the study, this year was likely to be even better for Australia with more than 55% of businesses expecting to grow, despite growing economic challenges.