The internet matters for Australian businesses
There is huge potential for Australian businesses to use innovative systems and processes.
The internet is key to unlocking this potential, especially in regional areas.
“Without a thriving commercial sector in regional areas, we risk concentrating growth businesses in capital cities, which could ultimately lead to a deterioration of our important country areas,” says Associate Professor John Steen, a strategic analysis expert at UQ Business School.
There is an opportunity for Australia to do more to encourage local businesses to remain in regional areas, to drive local economies and Australia’s innovation ecosystem.
“Regional areas can afford to lose some businesses, but they need to have a critical mass to sustain the population and business services that help local companies to be viable and competitive,” Associate Professor Steen adds.
As recent research by UQ Business School shows, there is a connection between the ability of a business to be innovative and its internet access. The research for Redland City Council looked at ways to encourage businesses with high potential to stay in the area.
It recommended the council implement a three-pillared approach to retaining these organisations: implement a high-performance internet strategy, address infrastructure challenges like office space and roads and create business networks.
When it comes to internet access, the results suggested unreliable internet is a growing problem for regional businesses. Indeed, firms that have intentions to leave regional areas are more likely to name internet performance and cost as a barrier to growth.
Of course the issues that businesses are facing in Redlands are not exclusive to this area. Poor internet access is a growing problem for businesses right around the country, one that needs to be addressed as a matter of urgency.
One business owner who knows this only too well is builder and electrician Craig Jolly, who owns Intelligent Constructions and Electrical. The thriving business is located in Murrumbateman, which is 45 kilometres from Canberra.
“Our internet access is so bad it makes it difficult to use cloud-based accounting and job scheduling software. I have had to go back to a more manual system. Not being able to rely on cloud technology really affects my productivity,” he says.
Research1 by the Grattan Institute highlights why cloud computing is attractive to small businesses. The paper defines cloud computing as “…a natural outcome of three related developments in ICT: robust connections, powerful devices, and large-scale cloud infrastructure.”
The research found cloud computing is more flexible and cheaper than traditional IT, and adds capabilities to a business. For instance, it supports mobile access to information, it allows businesses to easily standardise processes and update information remotely. It also reduces risk.
Echoing Grattan’s research, Jolly argues that if Australia wants to be an innovative country, businesses must have fast internet to access tools such as cloud computing systems.
“I prefer to order all my materials online, so they can be delivered. I can't have a competitive advantage if I can’t order online and I have to spend two hours driving into town and back to pick up orders. Not having reliable internet hinders my business outcomes,” he says.
Stuart Goodfellow from Regional Business Specialists, a regional small business consultancy firm on the NSW mid north coast, is another business owner whose company suffers from inadequate internet access.
Goodfellow explains the tyranny of distance and a low business density base in regional Australia makes it difficult to see clients face-to-face, so internet is a critical business tool.
“This means that video conferencing, webinars and podcasting are essential to help small business owners work on and in their business,” he says.
Goodfellow says the challenge is getting new business. “If prospective clients have difficulty connecting they will simply drop off. We only have one chance to make a first impression and an unreliable internet restricts our business. The problem can only be rectified with a larger bandwidth.”
He says better access to suitable internet is essential for his business to survive.
“If the current service is the best we can access we will be forced to change our model, leaving business owners having to become more reliant on phone, requiring them to travel vast distances or have fewer face-to-face meetings. Regional small business is tough and without adequate technology, business will become tougher.”
1 Minifie, J. (2013), The silver lining: cloud computing and small and medium enterprises: A Grattan paper, The Grattan Institute