Digital hesitancy holding back NZ business - report
Small businesses experience higher revenue and productivity when they readily adopt new technology, according to new research.
However, the research, conducted by Xero, found technological hesitance is holding small business owners back from achieving success.
In the behavioural science research study One step, more than 4,200 small business owners across six countries (Australia, New Zealand, the UK, the United States, Canada, and Singapore) were surveyed about their technology adoption.
The results found those that readily adopt new technology enjoyed, on average, 120 per cent higher revenue and 106 per cent higher productivity.
Digitalisation also improves satisfaction levels - of those running or working for digitalised companies, 27 per cent are more likely to wake up excited about their work.
Xero’s managing director for New Zealand & Pacific Islands, Craig Hudson, says that despite these findings, only one in five Kiwi small businesses consider themselves as technology adopters, compared to nearly one in four who admit they continually delay investing in new technology.
“This disparity in mindset – something we’re calling an adoption gap – comes from several sources identified through this survey," he says.
“Namely, mindsets and perceptions about technology and change. Small business leaders tend to believe their current solutions are good enough, coupled with anxiety about how complex and costly the change process might be."
The study also found that while eight in ten New Zealand small businesses felt confident about embracing new technologies, only 19 per cent considered themselves to be active adopters of the latest technology.
New Zealand small businesses were:
- Highly likely to feel confident about comparing different tech options (8 in 10) or their ability to manage the rollout of new technologies amongst other tasks (8 in 10);
- Relatively unlikely to worry about the stress of upgrading to newer tech solutions (4 in 10); but also
- Likely to get annoyed if told what’s best for their businesses (5 in 10).
“Small businesses may know the benefits, but they’re not adopting technology because the idea of doing so feels deeply uncomfortable and even threatening,” says Hudson.
“There are great resources available for all small businesses, such as DigitalBoost.govt.nz, but the key is how we talk about engaging with this advice.
“For example, we should be encouraging smaller, incremental changes rather than high-cost, sweeping upgrades. Just digitising one aspect of your business can have a huge impact, and then overtime SMEs can build more," he says.
“It’s about biting off what you can chew, rather than telling SMEs that they need to fix everything to feel the benefit.
“With a few small, simple adjustments to our practices, we can help our small businesses achieve the full potential that digital technology offers them.”
Based on its results, One step offers several recommendations for how policymakers, advisors, and technology vendors can help small businesses by presenting technology adoption in a more straightforward, less daunting way. These include:
- Celebrating small businesses who’ve benefited from technology adoption as examples that normalise digital change;
- Quantifying the true gap between current operations and those enhanced by technology; while also
- Measuring technology’s benefits in a way that’s more relatable to small businesses’ experiences; and
- Narrowing and simplifying technology choices to minimise decision paralysis.