Australian SMEs have caught the innovation bug and are serious investors in the space, according to MYOB Business Monitor research findings.
The MYOB Business Monitor, now in its sixth year, is a bi-annual national survey of over 1000 SME business owners.
MYOB Chief Technical Officer, Simon Raik-Allen, said technology was the hot ticket for SMEs in terms of innovation investment.
“SMEs see that technology can help them do business more efficiently and service their customers better. In the last 12 months, 31 per cent had acquired new computer hardware or software and 26 per cent had acquired new machinery and equipment.
“And at a time when knowledge is recognised as the key to Australia’s future prosperity, it’s great to see SMEs investing in acquiring knowledge (22 per cent) and employee training (17 per cent). We need to keep adding to our collective skills base to remain relevant and competitive, especially when the Business Monitor showed SME confidence in the economy is uncertain for the next 12 months,” said Mr Raik-Allen.
Implementing new business or management techniques (16 per cent) rounded out the top five areas for innovation investment.
The MYOB Business Monitor also asked SMEs what they considered to be barriers to innovation. The top responses were:
“The good news is that the Turnbull Government has placed innovation at the centre of its policy platform, including addressing regulatory barriers around start-ups and encouraging investment in R&D," Raik-Allen said.
“Noting that access to investment was a barrier for some, another significant finding was that 55 per cent of operators had not sourced any capital or finance in the last 12 months, showing that most SMEs are self-reliant when it comes to capital cash.
“Of the 40 per cent that had, 18 per cent had used one of the Big 4 banks, with family and friends and credit card companies being the next largest source of finance at 7 per cent each. Investors were a source for just five per cent, and home equity helped out 3 per cent.
“We could see this mix start to change with the entry into the Australian market of specialised small business lenders like MYOB partner On Deck Australia.”
The MYOB Business Monitor also looked at how SMEs were conducting themselves online.
Raik-Allen noted that while the number of cloud users are growing, a significant proportion of SMEs are yet to embrace cloud computing.
“This Business Monitor found that 40 per cent of SMEs are doing at least some of their business in the cloud, which shows that many are still sticking with tried and true methods and missing out on the significant time savings and simplification of process made possible by working with Cloud-based solutions.
“Based on MYOB’s own record growth in cloud customers, we can expect the shift to the cloud to continue.”
They are however, more likely to use other cloud based applications such as social media to help build their businesses.
“Social media is used by just over a third of respondents – retail and hospitality led the pack with 50 per cent using social while just 24 per cent of construction and trades were utilising this medium.
“With Australians being massive users of social, this could be an area of focus for businesses looking to unlock a wider customer base. Of those that did have a social site, 30 per cent said it generated more leads or customer enquiries,” Raik-Allen said.