Tuesday, June 18, 2024

Report reveals impact of NBN on small businesses

Small businesses in mature national-broadband-network (NBN) regions grew employment by one-third more than businesses in non-NBN regions in 2017. They also increased revenue by almost two-thirds more.

So says a new report, ‘From little things big things grow’, from Xero Small Business Insights and AlphaBeta.

The report’s overall message is clear – small businesses and the economy are benefiting from increased access to high-speed broadband.

Adding to this momentum are business apps. These 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,” Xero Australia Managing Director Trent Innes said.

“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.”

App use the key?

Xero analysed data from businesses using the hundreds of cloud-based apps that plug into its open API platform.

“There’s a strong relationship between app use and better business performance,” AlphaBetta Director Andrew Charlton said. “The analysis found that businesses generating jobs are turning to apps to help manage their growth.”

Of course, there are many factors that affect growth in revenue and employment. But 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 per cent) 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,” Mr Charlton said.

Businesses that use connected apps had higher revenue growth than those on Xero not using connected apps, the report showed. They were also more likely to create jobs.

Room for improvement

Despite digital connectivity improving across the country, Mr Innes said there’s still work to do. Many small businesses are still not taking advantage of the opportunities, he says.

At the last count by the Australian Bureau of Statistics, two-thirds of small businesses were not connected to high-speed broadband.

Finally, about 30 per cent of businesses still lodge their BAS statements on paper. Fourteen per cent of small businesses don’t use IT for their bookkeeping and accounting.

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