Government regulation and the cost of developing and introducing new technology are among the key barriers to small businesses looking to innovate during the new year, according to the latest instalment of MYOB’s business monitor survey.
The survey of more than 1000 small business owners from around Australia found while 31% of SMEs have bought new technology or hardware in the past 12 months, there is still a long way to go when it comes to creating the “agile” nation Prime Minister Maclolm Turnbull would like to see.
MYOB chief technical officer Simon Raik-Allen told SmartCompany the biggest barrier to small business innovation is the cost of developing or introducing new technology, with 28% of respondents to the survey citing this as their major hurdle.
“New stuff is expensive and small business does not have huge amounts of working capital,” Raik-Allen says.
“But number two, at 23%, is government regulation. The Turnbull innovation policy is talking about reducing red tape, which matches beautifully with the pain-points we’re hearing from small businesses. So it’s a good first step.”
Raik-Allen says other factors that are stifling innovation for small businesses include a lack of R&D funding as well as marketing expertise.
“The Turnbull government has talked about addressing access to government funding,” he says.
“And people often don’t have those marketing skills – they’ve got their expertise in their own domain or field. So that’s a real challenge. Build it, and they don’t come. Build it and spruik the hell out of it, and they just might.”
However Raik-Allen says the good news is one third of respondents to the MYOB survey indicated they use social media, which helps put their businesses in front of potential customers.
Meanwhile, access to investment came in as the fifth most common issue for small business innovation.
“I think in 2016 we’ll see a real shift in how people are getting their funding,” Raik-Allen says.
“There’s a perfect storm for an exciting 2016 for small to medium enterprises.”
Here are the top five barriers for small business innovation, according to MYOB:
1. The cost of developing or introducing new technology (28%)
2. Government regulation and red tape (23%)
3. Lack of R&D funding (14%)
4. Lack of marketing expertise (14%)
5. Access to investment (12%)