Australian small businesses older, less innovative than international counterparts

Australian business owners are older and less likely to adopt innovative technologies than their counterparts across the Asia-Pacific region, a new CPA Australia report says, suggesting digital upgrades and effective social media use could boost local productivity.

CPA Australia released the results of its 15th annual Asia-Pacific Small Business Survey on Tuesday, spelling out how Australian small businesses compare to those across New Zealand, Indonesia, Hong Kong, India, Malaysia, the Philippines, Singapore, Taiwan, and Vietnam.

It found 55% of Australian small business owners and operators are above 50 years old, compared to the survey average of 28%.

A graph showing the average age of small business owners across the Asia-Pacific region. Source: Asia-Pacific Small Business Survey 2023-24

Those results are no surprise and hew closely to the findings of last year’s survey results.

But they remain significant because of the long-standing correlation between age and business innovation.

Across the region, businesses owned by someone under the age of 40 were significantly more likely to grow over the survey period.

Youth was also highly correlated with business innovation.

Source: Asia-Pacific Small Business Survey 2023-24

The seniority of Australian small businesspeople is “great in respect of knowledge and experience,” CPA Australia business and investment policy lead Gavan Ord said in a statement.

“But the survey data shows they are much less likely to be using technology like e-commerce and social media.”

More precise data shows exactly where Australian businesses are lagging behind.

Australian and New Zealand businesses remain the most likely not to use social media to help promote their enterprise, at 30% and 33%, respectively.

By comparison, the regional average was 12% in 2023.

Despite the massive success some Australian e-commerce retailers have experienced in recent years, Australian businesses are also the least likely to report notable sales from online channels.

And compared to the plethora of next-generation payment systems adopted across the Asia-Pacific region, Australian businesses are less likely to adopt those options, instead opting for established players like EFTPOS.

Perhaps the reluctance to embrace new technologies is best expressed in data showing who businesses turn to for advice.

In Australia, accountants were the most popular source of advice, with 42% talking to their bookkeeper for guidance.

The next most popular source of advice was friends and family (22%), well ahead of IT professionals (17%).

“Small businesses in other markets are investing in technologies and seeing the rewards, while too many in Australia are missing out,” Ord said.

“This slow pace of technology adoption is hurting both individual businesses and the economy as a whole.”

There are options for small businesses that do want to become more innovative.

The multimillion-dollar Digital Solutions — Australian Small Business Advisory Services Program provides free advice on everything from social media and digital marketing, through to advice on how to sell online.

Separately, the Cyber Wardens program offers small businesses tools and education on how to improve their cybersecurity.

More broadly, however, the survey results pose questions about why younger Australians are not starting or buying small businesses at the same rate as their international counterparts — a generational change that could potentially bring a wave of innovation with it.

“Inspiring young people to start a business, or purchase an existing one, will be a crucial part to our future economic success,” Ord said.

You can access the full CPA Australia report here.