Green shoots: Australian businesses bounce back
There are many business opportunities as the economy rebounds. What will it take for your business to return to growth?
Australian Chamber of Commerce and Industry and the University of South Australia into the impact of the pandemic on Australian business.
The Impact of Covid-19 on Australian Business survey found that Covid changed how Australian businesses trade, operate and communicate – and that much of that was for the better. Thirty-five per cent of businesses brought forward ecommerce integration due to trading restrictions, and 39 per cent said they planned to diversify supply chains in the next six to 12 months.
Businesses proved resilient and able to transform operations to survive. Some sectors benefited immediately from Covid – supermarkets, digital providers, electronics retailers – while industries predicted to see a ‘new normal’ boost range from cybersecurity and online learning to ehealth and pharmaceuticals. Forty per cent of all businesses indicated they will hire new staff in the next six to 12 months and 42 per cent said they would hire new roles in digital marketing, content management and ecommerce.
Susan Freeman, Professor of International Business at the University of South Australia and a co-author of the survey, sees green shoots poking through the residual effects of Covid.
“Some small firms – for example, those in financial services or support services for SMEs – can’t keep up with demand,” she says. “A lot of businesses haven’t responded to previous outside competitive pressures and have had to pivot quickly as the pandemic unfolded by bringing in these services.
“There are also a lot of new businesses coming up in hospitality – for example, in catering. Some have been able to switch into online deliveries. And, because people can’t be sure that flights will run, they are driving. That’s created a domestic travel boom, especially in rural areas. We also see a boom in the property market continuing.”
As Freeman adds: “We underestimate how resilient Australian businesses are.”
An opportunity to reinvent
That resilience was helped, in part, by the relief provided by the government’s JobKeeper scheme.
Freeman says many businesses used JobKeeper to step back and think about their operations. “It gave them some space to work on the next innovation, trend or product.
“We’ve been talking to firms that are finding better ways of doing what they were doing,” she continues. “They’ve used this period to work out where their new customers will come from [and] how to better connect with existing customers (who might refer new customers).”
Freeman adds that Covid has seen many businesses accelerate their move into ecommerce and cloud and digital infrastructure.
“A lot of businesses have told me that the changes they have made, they knew they had to make but, in an era of COVID-19, they were galvanised into action.”
Turning supply chain challenges to an advantage
One area of operations in particular came to the fore in the survey’s findings. Freeman and her colleagues found that supply chain disruption was the single greatest threat to most businesses during Covid, with more than one-third exploring supply chain diversification – to Europe and Scandinavia in particular – to increase resilience as traditional Chinese lines of supply experienced turbulence.
Some businesses also held more inventory to meet short-term demand, despite the higher costs of doing so, Freeman says. “While others took a more novel approach to supply chain challenges – for example, rather than selling in bulk, they have been packaging fewer products in order to get these to customers faster. Small packages are cheaper to buy for customers watching costs.”
For all that, the survey’s findings suggest that regional supply chain challenges could actually work in Australia’s favour.
“The COVID-19 disruption of international supply chains into Asia has led to some instances of oversupply and poorer quality product available domestically in select Asian markets, driving price competition,” it states. “The perception is that what is produced in Australia is the best available and much sought after. Thus, a very positive future is envisaged.”
Freeman notes that Australia is perceived globally as a safe place in which to be educated, conduct business and travel. We also produce high-quality products. “The message is that the quality of Australian product is excellent,” she states.
Resetting for growth
With growth being front of mind for many Australian businesses, Freeman’s advice is to look at how competitors here and overseas are operating and solving problems.
“Think of your processes and procedures,” she says. “Don’t necessarily look at cutting costs but rather at new ways of doing things. What do your customers need solved at the moment? Have you got other potential customers who could use your services in a way you haven’t thought of before?
“It’s also about working out the people you want to keep, ensuring you look after those people, recognising flexibility in how people wish to work and realising that you need to hang onto your culture. You also need to be aware of how your staff are feeling and managing.”
And for those firms already digitally organised, the survey suggests more opportunities will present themselves, especially in Asian and Pacific emerging economies. It identifies online translation services that reduce traditional language barriers as further supporting growth opportunities outside Australia.
With this in mind, Freeman suggests talking to your competitors in overseas markets to see where you could collaborate. “You don’t have to do it on your own,” she says. “Try to see the bigger picture. This is not a time for you to sit back harvesting. It’s a time to think about what you are doing and what’s next.”