The Australian government recently released a commission paper looking into the disruptive nature of technology – as well as how businesses can respond.
Within the 251-page report Digital Disruption: What do governments need to do? is information relevant to helping small businesses achieve growth.
According to the report, Australian businesses are not keeping up with consumer demand.
The report states that approximately 14 per cent of Australian businesses are adopting new technology, lagging behind businesses in other countries.
Only 20 per cent of Australian businesses have some kind of online ordering process or payment facility. Furthermore, the Organisation for Economic Co-operation and Development (OECD) ranked Australia 20th out of 32 countries for its proportion of businesses that have websites.
The report outlines three different ways to disrupt current market structures:
- The reduction of transaction costs through outsourcing allows businesses to organise their operations more efficiently and change their structures.
- Online interaction helps the social networks of business owners become closer, which allows knowledgeable sources within markets to help each other and collaborate more efficiently.
- Assets, especially non-market assets, are now more easily shared and can aid in collaboration.
Not only are markets being disrupted, businesses are too. These trends are opening up new opportunities for small businesses to harness technology to their advantage.
Changing business models
Technology also disrupts word of mouth, as digital platforms can reach millions of consumers.
Businesses that incorporate consumer reviews into their products or services enable customers to drive trade, creating credibility if their ratings are consistently high. This practice also increases consumer feedback.
A boost in productivity
Technology is further disrupting traditional businesses by lowering production costs.
For example, through locating content that has no copyright restrictions, businesses can save time and money in the creation of digital spaces.
How to monetise
Trying to monetise digital networks can be difficult; the report noted that advertising can only bring in limited revenue for businesses.
Three tips mentioned in the report are to attach a price for premium content, either delivered quicker or in a greater amount; to have consumers pay to receive advertisement-free content; or to create a digital tip jar by asking consumers to contribute small amounts of money for ongoing development.