The growing digital divide in the small business community caused by its technophobia is a big concern for Governments globally. We’re seeing Singapore invest over AUD $352 Million and the UK commit more than AUD $900 Million to assist their small businesses to adapt to digital. But to date, Australia’s response has been limited to ad hoc efforts.
CEO of CPA Andrew Hunter says “While businesses should play an active role in digital transformation, the government needs to play a bigger role in helping businesses manage this change… Ad hoc financial support for digital transformation isn’t sufficient. There needs to be a significant commitment of public funding to help transform Australian small businesses.”
What is ‘technophobia’?
Technophobia refers to a business owner’s reluctance to use technology to expand the customer base, improve service, optimise marketing, minimise admin and comply with regulation. And the implications for the long term sustainability of small businesses in Australia are very serious.
In October 2020 Australia Post and Deloitte Access Economics released their report into “Australia’s eCommerce revolution: how it saved businesses in COVID-19 and future strategies to thrive”. The findings showed that businesses who had invested in eCommerce saw almost no fall in revenue, while those who hadn’t invested saw an average revenue decline of 20%.
More recently, Xero released their report on ‘Behavioural Barriers to Tech Adoption Amongst Small Business’, showing that across the 4200 business owners surveyed 31% of all Aussie respondents identified as someone who delays adopting technology.
This research starkly reveals the impact of technophobia in the reasoning behind this delay, with 18% of respondents saying they are resistant to change, 15% sharing uncertainty about choosing the right solutions, and 13% saying they are ‘stuck in the present’.
The language of technophobia
Working with business owners for the last three decades, I can see these statistics align perfectly with the top five reasons people give me for not making the most of the available technology. Time and again, I hear:
- The technology I have isn’t perfect, but I’m sticking with what I know.
- There are too many options, I don’t know how to figure out the ‘right’ solution.
- If I change what I’m doing, it’ll really hurt my business.
- I’ve already spent so much time and money on this other piece of technology.
- Who has the time to learn and embed new technology?
How technophobia is impacting business
The Xero report shows that respondents who identified as an ‘early adopter’ of technology reported high value benefits. These included higher revenue (around 120% higher than the delayers) and significantly increased productivity (around 106% over their technology challenged counterparts).
It’s painfully clear technophobia is hurting the bottom line and adding to the number of hours spent working in the business.
More importantly, the impact on business resilience and relevance is undeniable.
With repeated blows from bushfires, floods and the pandemic, businesses have had to quickly embrace new ways of doing things. This has led to seismic shifts in customer behaviour and technophobic owners have been left behind.
Black Friday/Cyber Monday has solidified as Australia’s peak online shopping experience, with consumers spending more than $8 Billion in November 2021. This is a whopping 48.5% growth since 2019 (Source: Australia Post eCommerce update December 2021).
And yet, according to GoDaddy, 59% of all Australian small businesses do not have a website. Even today, 35% of small business owners still think they’re ‘too small’ to have a website (Source: Pixolobo)… although they recognise that potential clients will research their options online and they know they’re missing out.
This basic website issue spotlights the frightening ramifications for technophobic businesses.
There is no ‘quick fix ’for technophobia. Australian governments at all levels need to make a serious investment if we’re going to close this gaping digital divide and ensure the longevity and prosperity of our vital small business sector.