Businesses that embrace new technology have significantly more opportunity for business growth according to a new report by Xero and economics consultancy group AlphaBeta.
The Digital Connectivity Report suggests businesses that are connected to the NBN are increasing their revenue by almost two thirds more than their non-NBN counterparts and that those that utilise automation for traditionally manual tasks are also benefitting.
The report’s data compared business outcomes in two distinct regions: areas where NBN access was mature in 2016 and areas where the NBN had not yet arrived. Those with mature NBN services grew employment by one third over their non NBN counterparts.
Overall, the Digital Connectivity Report suggests small businesses and the economy are benefiting from increased access to high-speed broadband. Adding to this momentum are business apps that help automate traditionally manual tasks, from processing expenses to scheduling client appointments and rostering staff.
“Many people have been fearful the digital revolution will result in the loss of jobs,” said Trent Innes, Managing Director of Xero Australia. “Instead, what our data suggests, is that it actually does the opposite. It’s enabling small business growth, and those that are leveraging digital the most are seeing significant benefits.”
The report also found app integrations are associated with better outcomes for small businesses. Xero analysed data from businesses using the hundreds of cloud-based apps that plug into its open API platform. Small businesses are able to seamlessly connect apps that simplify tasks such as employee rostering and invoicing.
AlphaBeta Director Dr Andrew Charlton commented:
“There’s a strong relationship between app use and better business performance. The analysis found that businesses generating jobs are turning to apps to help manage their growth.”
Xero Small Business Insights data also showed that businesses that use connected apps had higher revenue growth than those on Xero not using connected apps and were more likely to create jobs.
Businesses that hire more people are more likely to adopt apps. While there are many factors that affect growth in revenue and employment, businesses in the sample that used at least one app in 2017-18, on average, increased employment in the previous year by 2.2 percentage points (or at least 40 percent) more than similar businesses that didn’t use apps.
“Increased access to infrastructure, lower prices, greater choice, and innovation and specialisation in the app market are helping small businesses access technologies and functionality previously beyond their reach,” said Charlton.
Innes suggested digital connectivity is evolving from a ‘nice to have’ to a ‘must have’.
“With the mandatory government rollout of Single Touch Payroll (STP), mandatory two-factor authentication (2SA), and increased use of e-invoicing, it’s critical that businesses, technology providers, government and advisors come together. We need to help small businesses overcome barriers like lack of awareness, lack of time, and fear of change to make this digital transition. It will not only help them meet their compliance requirements but will help boost economic growth across Australia,” Innes said.
The rollout of the $49 billion NBN is almost 50 per cent complete. Currently approximately 30 per cent of the nation’s small to medium businesses are now connected to the network.