Budget measures will help small businesses close the digital skills gap
It’s no secret that small businesses are the lifeblood of Australia’s economy, and many have struggled to stay afloat during the pandemic.
In 2021, Vista’s Small Business Recovery Report found that six in 10 (60%) Australian small business owners dipped into savings, 50% cut back on shopping and one in five (18%) a borrowed money from a friend or family member to survive.
But with tax deductions for employee training and digital technologies announced in the 2022 federal budget, small business owners will find some relief in the support provided to help make their business resilient and sustainable.
digital or bust
Consumer behavior has changed during the pandemic – and there’s no turning back. SMEs now operate in a world where digital is not only essential but the preferred channel for many customers.
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However, the report of the Organization for Economic Co-operation and Development (OECD) The Digital Transformation of SMEs, identified the digital skills gap as one of the biggest barriers to digital adoption by SMEs. Size and resource constraints are the main reasons that keep SMEs from going digital. This lack of digital know-how makes SMEs less productive, sustainable and resilient.
Vista research also found that one in three Australian small business owners (32%) struggle with marketing and one in five struggle with IT, website and digital services (18 %).
In a variation of the famous “give someone a fish and you feed them for a day”, we need to help small businesses learn to fish in new waters by improving their skills in all things digital.
One-off cash injections are palliative measures and not a long-term solution. The announced tax deductions help accelerate learning so that small businesses can learn how to attract and retain customers in the digital realm.
Government incentives key to public-private partnerships
The OECD says government has the power to play an important role in reducing the digital skills gap of SMEs by providing tax incentives for SMEs to undertake training, particularly in digital marketing and business management. Web sites. Stronger links and cooperation between the private and public sectors and higher education providers are now needed to facilitate the contribution of initiatives such as business acceleration schemes.
For example, the governments of Latin American countries and the Inter-American Development Bank are co-funding coding boot camps to meet demand from local communities, especially young people and entrepreneurs.
Encourage emerging entrepreneurs
It’s not just about investing in digital skills. One group that did not make it into the budget is budding Australian entrepreneurs. Investing in incentives to nurture emerging entrepreneurs and startups — especially the digitally savvy younger generations — should also have been high on the main parties’ list of priorities.
Much of the government’s pandemic financial aid was aimed at keeping cash flowing to stay afloat and sustaining jobs, not incentivizing entrepreneurs to create them. COVID-19 was a time for survival. Now is the time to reward innovation. More government incentives for creators would go a long way to rebuilding the ambitious innovation pipeline. The private sector will also have an important role to play in incubators and hubs to support this community.
Opportunity arises from adversity. The biggest opportunity for Australian small businesses is a digital-driven recovery. The initiatives outlined in the government budget will allow the sector to recover, but now is the time for the private sector to step in to help see the community thrive.
Marcus Marchant is the CEO of Vista Australia.