NZ experiencing a "digital divide" among SMEs

New Zealand’s SME community is still divided by the use of the internet and internet technology...

New Zealand’s SME community is still divided by the use of the internet and internet technology, in the latest research from accounting software provider MYOB.

According to the latest MYOB Digital Nation report, there’s a marked difference in performance between businesses with an online presence and those without a website or social media site.

Findings show that 47% of local SMEs don’t have any kind of online presence, while 22% operate a business website only, 9% have only a social media site for their business and 16% have both.

Over the last 12 months, 46% of businesses with a website saw an increase in revenue, compared to just 35% of businesses with no online presence.

Over both the next quarter and the full year ahead, online businesses will enjoy an even greater advantage, with 45% reporting more work in the pipeline over the next three months, compared to 31% of businesses without a web presence, and 49% expect to see higher revenue in the year to September 2015, compared to 32% of businesses that are not online.

MYOB Chief Technology Officer, Simon Raik-Allen says over the last five years the survey has consistently demonstrated that online engagement represents a clear advantage for local businesses.

“Not only are online businesses enjoying a greater level of increased revenue, local SME operators also report a wide range of direct benefits from being online,” Raik-Allen says.

“From increased leads to heightened customer engagement and a more professional image. Being online offers a wide range of benefits for business in the digital age.”

Regional connectivity…

Across the country, there is also a significant difference in the levels of SME online engagement - Hawkes Bay is the country’s most connected region and Auckland the leading centre.

Of the centres, Wellington is the least connected, with 59% of businesses having no online presence. In the regions, Manawatu / Wanganui (63% no online presence) and Otago / Southland (61%) have the lowest levels of business internet use.

Online sectors…

New Zealand’s key business sectors also report significant variation in the use of the internet to promote their business or sell products and services.

The manufacturing and wholesale industry has the largest online presence in the country, with 60% of businesses operating a website, and a further 13% using only a social media site.

Retail and hospitality sector businesses are most likely to operate both a website and a social media site (29%), while a further 25% have only a website and 9% only use social media to promote their business.

The majority of SME operators in the primary sector are still to move online, with 68% reporting no online presence. Just 14% have a website and only 4% operate both a social media site and website.

SMEs and the cloud…

The use of cloud computing is generally increasing among SMEs, although some business operators are uncertain what exactly constitutes the cloud – pointing to perhaps a higher use than is reported.

In the latest Business Monitor, 25% of business operators reported they were using cloud computing. A further 9% of SMEs intend to take up the technology in the next 12 months.

Email and online banking are the most commonly used online services in New Zealand. The growing use of online file sharing, and the increasing popularity of online communication services and VOIP is also evident in the survey. Currently, just 14% of SMEs use an online accounting solution.

Social centres

While 42% of New Zealand businesses were using some form of social media, LinkedIn (26%) and Facebook (16%) were still well ahead of other social media sites in popularity. Importers (60%), manufacturing and wholesale businesses (57%), and business, professional and property services operators (48%) were much more likely to use social media.

Across the country, use of social media to connect with colleagues and customers was more common in the main centres, with Auckland the country’s most social city for business.

Connecting on social media:

• Auckland - 51% • Wellington - 46% • Christchurch - 42% • Rest of NZ - 35%

“In this survey, we are extremely pleased to see a growing number of businesses adopting a wide range of internet tools and services,” Raik-Allen adds.

“Unfortunately only around half of New Zealand small and medium businesses have an online presence and when you see in this survey the clear difference that being online makes – it is a big opportunity loss – not only to the businesses themselves, but the whole economy.”

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