SMEs Need A Little Help And A Whole Lot Less Hindrance
A recent Regus survey of 26,000 businesses in 90 countries revealed that 75% of Australian entrepreneurs considered lack of access to credit their biggest barrier to success, 67% cited red tape and 56% lack of government support.
Yet the research found 51% of entrepreneurs believed small business was the sector most likely to grow next year - despite the negativity of many a media comment.
The still relatively high local dollar and increasing international competition are of course significant hurdles for exporters. Nonetheless the 2013 DHL Export Barometer shows 58% of Australian exporters anticipate increased orders in the year ahead – although only 48% expect profits to rise.
Key Barometric Readings
The Barometer indicates that:
- Just over half of Australia’s exporters in the past 12 months exported to New Zealand, 42% to the US and 38% to China.
- The US and China are the strongest threats to future export success.
- China nonetheless is expected next year to be Australia’s top growth destination for exports.
- Despite 60% of exporters saying the Australian dollar represents the most negative effect on sales, they are tending to cope better by making the most of opportunities closer to home – namely in Asia and New Zealand.
Lack of institutional support means that business owners must strive for flexibility in ways they operate – avoiding for example lengthy leases and freeing up working capital so they can, as opportunities arise, concentrate on expansion.
It’ll be very interesting to see the extent to which The Australian Chamber of Commerce and Industry (ACCI) campaign – “Small Business: Too Big To Ignore” – bears fruit after the September (or now possibly August) election.
ACCI's Voice Unheard
In a speech he gave in Canberra recently the ACCI’s chief executive Peter Anderson said SMEs have been suffocating "at every level” and won’t begin to breathe clean air until government regulations and the tax system are rid of the complications that have made compliance time-consuming and burdensome.
He further opined that "Small Business feels squeezed from influence when minority voices and interest groups hold sway."
He wants the job-destroying payroll tax reduced and eventually phased out, but says this doesn’t mean he wants to see the GST increased to replace payroll tax revenue.
What he does want to see, is a government spending less on small scale projects that won’t yield mid to long-term economic benefits, and instead, committing to such major infrastructure projects as a western Sydney airport and high speed rail links between major cities.
Future Directions
Because 85% of Australia’s GDP comes from services – with manufacturing and mining included among the remaining 15% -- here at Macks Advisory we have difficulty in understanding the disproportionate amount of talk about such a comparatively small percentage of what should really concern Australians.
If ever it was time for change, surely that time is now – and surely part of this process means forsaking manufacture of things we once were good at, that Australians needed, wanted to buy locally, but no longer do, for things we’re good at making, are needed globally and people worldwide want to buy from us.
We produce a couple of hundred thousand cars a year – and that’s diminishing -- whereas there’s a global demand for 60m – and that’s increasing. Which begs the question why on-going hundreds of millions of dollars are being spent to protect this industry that could otherwise be spent investing in skills to support what could, and should be, a service and knowledge economy?
Education at $14.9bn annually is already our fourth largest export – worth almost as much as all the gold we mine each year. And education is ever sustainable and renewable.
Microsoft Australia managing director Pip Marlow in a media statement said Australia needed “a mind boom rather than a mining boom”, and a plan for delivering services that are competitive in a global economy. “Hope isn’t a strategy”, she said.
Sure, she is in a big business. But consider this: the industry she is in survives primarily because of its flexibility in forsaking things that once worked well to produce innovative things that work better. There is a lesson in this for SMEs.
