It’s been a rollercoaster of a year for small business so far. I’ve been both saddened and encouraged to hear from small business owners about how it’s impacted them. And although it’s been a tough time for many, we’ve also seen that in some cases, it’s given small business owners time to reflect on their business.
We’re in a very unique situation right now, with what I believe is a golden opportunity to boost New Zealand’s productivity as we start to rebuild the economy.
Before COVID-19, Xero commissioned research with the New Zealand Institute of Economic Research (NZIER) to explore how leveraging cloud technology could help grow New Zealand’s productivity. We found that a 20% uptake in cloud-based technology would add up to $6.2 billion in annual GDP growth for New Zealand’s economy. That’s a pretty significant gain in productivity.
This is something very close to my heart. If we can unlock the potential in all Kiwi small businesses to improve cash flow, this would not only boost the economy but also give people more freedom and flexibility and ultimately have a positive impact on wellbeing.
Small businesses play a big part in this. They account for more than a quarter of NZ’s GDP, so when we transform SMEs we help transform our economy and lift the living standards of all New Zealanders. The challenge is to encourage and empower small business owners to invest in cloud tools.
How can we help SMEs work smarter, not harder?
Once small businesses started to open up after COVID-19, we asked them about the lockdown and their use of cloud technology. This research paints a clearer picture of how SMEs adapted to the new landscape.
For many, the last few months have been eye-opening. 42% of SMEs admit that, with the benefit of hindsight, they wish their business had better processes in place before COVID-19. Nearly three quarters also had to make quick changes to the technology they use to keep their business functioning during lockdown.
So, we know our small businesses are keen to implement better tools. But why aren’t they?
What I’ve heard from small businesses and from our research is that the cost of technology, the time it takes to implement and a lack of information about what to do is preventing them.
At Xero, we want to help get these tools into the hands of small businesses. We’ve put forward an ask to the NZ Government for a subsidy to help SMEs invest in cloud technology.
The productivity gains from being able to access best in class tools would save SMEs significant time and enable them to be more profitable – which in turn strengthens the Kiwi economy and gives back more to our local communities. This is an important opportunity to help small businesses recover and thrive in the long-term. We know that small businesses can change their processes with the right incentives and tools – they proved this during the lockdown. Now’s the time to maximise these productivity gains for the long term benefit of New Zealand.