Despite being touted as the key to economic recovery in 2022, many SMBs are still facing challenges, with relief not coming fast enough and business fatigue high, according to Vista Australia CEO Marcus Marchant.
As such, as the 2022 Federal Budget approaches, he shared insights into why Australia needs a digital-led small business recovery.
Marchant said Vista’s Small Business Recovery Report found that 60 per cent of Australian small business owners dipped into savings, while 50 per cent cut back on groceries and 18 per cent borrowed money from a friend or family member to survive in 2021.
He also attributed the Organisation for Economic Co-operation and Development (OECD) report, The Digital Transformation of SMEs, which identified the digital skills gap as one of the greatest barriers to SME digital adoption.
“What most SMBs couldn’t do was something that would make their business resilient and sustainable – building digital skills. Consumer behaviour changed during the pandemic – and there is no going back. SMEs now operate in a world where digital is not only essential but the preferred channel of many customers,” Marchant said.
“Size and resource constraints are key reasons stopping SMEs going digital. That lack of digital knowhow makes SMEs less productive, sustainable and resilient.”
Vista’s research also found that 32 per cent of Australian small business owners struggle with marketing, and 18 per cent struggle with IT, website and digital services.
“The OECD says the government can play an important role in reducing the SME digital skills gap by providing financial and tax incentives for SMEs to undertake training, particularly in digital marketing and website management,” Marchant said.
“We need to help small businesses learn to fish in new waters by upskilling in digital design across social media, digital marketing, web design and more. One-off cash injections are stop-gap measures, and not a long-term solution. The government needs to prioritise scalable strategies that fast-track learnings so small businesses can learn how to attract and retain customers in the digital realm.”
According to Marchant, stronger links and cooperation between private and public sectors and higher education providers is also needed to facilitate initiatives like business accelerator programs.
“Governments in Latin American countries and the Inter-American Development Bank are co-financing coding boot camps to meet demand from local communities, especially young people and entrepreneurs,” he said.
“In a similar vein, Vista launched ‘99 Days of Design’ to empower small businesses with financial support and refreshed design identities to build and grow their brand and business through digital design.
“Government support for Australia’s small businesses could extend to a voucher system like those introduced to stimulate spending to support hospitality, entertainment and tourism providers during the pandemic. A digital skills voucher for small business could go towards training in digital marketing or investment in digital products.”
Marchant also mentioned that investment in incentives to encourage emerging entrepreneurs and start-ups – particularly digitally savvy younger generations – is also top of small business owner’s priorities for the pending budget.
“Most government pandemic support was aimed at maintaining cash flow to keep afloat and keeping jobs, not incentivising entrepreneurs to create them. COVID was a time for survival. Now is the time to reward innovation. More Government support for creators would go a long way to rebuilding the aspirational innovation pipeline,” he said.
“It’s another area where public and private sectors have a role to play, through incubators and hubs. That’s why Vista has teamed with IFundWomen, to launch ‘ReferHer’, to connect women with resources, funding and coaching at co-working spaces globally, including One Roof in Melbourne.
“Opportunity is born from adversity. The biggest opportunity for Australia’s small businesses is a digital-led recovery. The question is how. Let’s see if the Budget gives some answers.”
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