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Two-thirds of businesses feel unprepared for ‘digital wave’

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Two-thirds of businesses feel unprepared for ‘digital wave’

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Reporter 2 minute read

Approximately two-thirds of Australian businesses do not feel prepared for technology-driven globalisation, according to new research from Commonwealth Bank.

According to new research from Commonwealth Bank’s asset finance study, Equip: Changing Economies Report, which involved a survey of 891 businesses, 74 per cent of Australian businesses “do not feel prepared for a new wave of digital and emerging technology-driven globalisation”.

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The research also revealed that the evolving digital marketplace is placing increased cost and revenue pressures on local businesses, with 86 per cent of businesses feeling the pinch from overseas competitors and 96 per cent pressured by online competitors.

Conversely, of the surveyed businesses, 90 per cent said that they have seen positive impacts from the easier access to overseas suppliers, providing more choice and the increasing ability to directly import used machinery.

Further, a majority of Australian businesses (92 per cent) noted that they are actively considering sharing assets or resources to boost revenue and/or lower costs, to help drive their adaption to digital and emerging technologies, in order to remain competitive.

Sylvia Terry, CBA’s managing director of asset finance, said that technology has had a significant impact on Australian businesses.

“Businesses need to use technology to be responsive to the range of new local and global competition that is taking place right now. Those businesses that look to new technologies to innovate and build new efficiencies into their operations will thrive and remain competitive,” the MD said.

“Encouragingly in asset finance, we are seeing businesses start to challenge the status quo of asset ownership and the high capital costs associated with it. Businesses are becoming savvy to the sharing economy and the benefits this can bring to capital-intensive industries.”

Moreover, the survey revealed that a small minority of surveyed businesses are participating in the estimated $14.5 billion sharing economy, with only 9 per cent of businesses sharing assets to cut costs and 7 per cent sharing underutilised assets to generate new revenue.

“We know the sharing economy has the potential to help businesses maximise the utilisation and efficiency of their assets; however, it is an approach that has a long way to go,” Ms Terry added.

“For a lot of businesses, the main barrier is trust. We know many businesses are willing to consider sharing assets from other businesses but are hesitant to share their own.

“We see this as an opportunity where emerging technologies, such as smart contracts that run on blockchain, could be applied on a trustable platform providing businesses with the structure and governance they need.”

[Related: Business confidence steady in June: NAB]

Two-thirds of businesses feel unprepared for ‘digital wave’
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