This report, released by Deloittes ands Google and authored by by Access Economics provides fresh insight into the role of digital strategies in Australia’s substantial small and medium-size business sector – a sector which contributed $530 billion to the economy in 2010-2011, over half of private sector economic activity, and employed over 7 million people, generating more than two thirds of private sector employment.
A national survey of 500 small businesses measured their level of digital engagement, such as having a website with business information or the use of digital marketing to attract customers.
Small businesses making full use of the internet with high digital engagement enjoy better business outcomes, with a $350,000 or 20% increase in annual revenue. These small businesses also have better growth prospects, more diversified sources of revenue and a bigger customer base.
High digitally engaged small businesses:
- Are two times more likely to be growing revenue and earn two times more revenue per employee than those with low engagement.
- Are job creators, being four times more likely to be hiring than those with low engagement.
- Are three times more likely to have growth as a business objective, use the internet as a critical facilitator to achieve growth and are three times more likely to be increasing investment in digital over the next year.
- Are doing more than just creating a website, as three-out-of-five small businesses have a website, but less than one-in-five have high digital engagement.
For small businesses with very low digital engagement there is significant low hanging fruit, such as creating a simple informative website for customers, which can increase business performance. While these businesses tend to prioritise survival over growth and view the internet as peripheral – increasing digital engagement can increase the efficiency of business operation, giving small business people more free time.
Few industries will be insulated from digital disruption, where new technologies are driving competition, changing markets, increasing consumer expectations and shifting the sands of profitability in the economy. The report’s conclusion is that Australian small businesses must consider online strategies if they are to navigate the digital disruption of coming years.