Commonwealth Bank’s Regional Business Insights report has revealed almost half of Australia’s regional businesses (49 per cent) see the potential for growth.
The report canvassed 470 regional businesses about the opportunities and challenges they face and discovered strong markets, growing populations and improved infrastructure is spearheading the charge for change.
CommBank Executive General Manager for Regional and Agribusiness Banking, Grant Cairns, says Australia’s regional businesses seem to be underpinned by optimism and suggested this is creating a knock-on effect across a range of industries.
Yet while nearly half of all regional businesses saw the potential to grow, a significant number – one in five – thought there was no opportunity or were unsure of what the opportunity might be.
“The research suggests regional Australia could achieve even better results with greater clarity around how to achieve meaningful growth,” Cairns says.
While regional businesses tend to think broadly about potential opportunities, they have much sharper insight when it came to challenges, with competition, input costs and red tape topping the list.
“In particular, online business is a double-edged sword in regional Australia. While it opens up the potential to trade outside local boundaries, it also gives competitors greater access to regional communities and that’s a significant challenge for many regional businesses,” Cairns says.
Whilst innovation is often seen as the domain of city dwellers, the report suggests regional businesses are also empowering their staff to be creative thinkers and risk takers, helping to drive a significant uplift in the Commonwealth Bank Regional Innovation Index.
According to the report, regional businesses are as innovative as their metro counterparts, as they look to capitalise on opportunities for business growth.
The latest Innovation Index, based on 15 different measures of management capabilities and entrepreneurship and ranked on a scale of -100 to 100, is now at 32.2 for regional Australian business, compared with 25.5 the previous year.
“The upward shift comes as nearly two-thirds of regional businesses now evaluate employee creativity and innovation skills as part of their appraisal process, while more regional businesses also report that they have employees who are not afraid to take risks and fail.
“Businesses are recognising that staff have valuable insights into what customers are looking for and where there may be opportunities,” Cairns says.
The report revealed 48 per cent of regional businesses are ‘innovation active’ (implementing genuine innovation rather than just improvements) compared with 46 per cent of metro businesses
57 per cent of the businesses surveyed saw expansion as their biggest opportunity, while 24 per cent said they were either unsure about future opportunities, wanted to keep business stable or saw no future opportunity.
According to the report, 25 per cent of regional businesses saw strong market or industry performance as creating opportunity, while 21 per cent said population growth was creating opportunity and 14 per cent said there was opportunity as a result of increased infrastructure.