New Zealand’s small and medium-sized enterprises (SMEs) could be missing out on productivity gains due to slow digitisation, according to a new report. Global small business platform, Xero, and the New Zealand Institute of Economic Research (NZIER) collaborated on the report, which advocates for accelerated digitalisation among the nation’s SMEs.
The research highlights that productivity is the long-term determinant of wages and living standards and demonstrates the role digital transformation could play in boosting SMEs’ efficiency. Despite the potential benefits, the pace of digital adoption among New Zealand SMEs is reportedly lagging.
Digitisation refers to the process of converting information into a digital format. This includes everything from using cloud-based software for accounting to implementing online sales platforms. The benefits are clear: reduced operating costs, better customer service, and the ability to make data-driven decisions.
However, the rate of technology uptake among New Zealand’s SMEs is relatively slow, according to the report. The reasons vary, but common obstacles include limited understanding of technology’s potential, costs associated with digitalisation, and a lack of time and resources for the transition.
The report also puts forward several strategies to accelerate adoption. This includes a combination of government incentives, easier access to digital tools, and incorporating digital literacy into business education programs. The goal is to help Kiwi SMEs recognise the potential of digitalisation and provide them with the tools and training to implement it.
Xero and the NZIER hope that this combined effort will encourage SMEs to embrace digital transformation, leading to increased productivity, wages, and potentially, living standards as a result.
In conclusion, while the journey towards digitalisation may present various challenges for New Zealand’s SMEs, the potential productivity gains make the process worthwhile. Encouraging digital adoption should be a priority to ensure the continued growth and success of Kiwi SMEs.
