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Why do we need a Small Business Digital Boost programme?

McKinsey estimated that in an eight week period COVID-19 accelerated the adoption of digital services and behaviours five years.  For many around the world this digital acceleration continued.  However, as NZ has been more protected from the ongoing impacts of COVID-19, we are now seeing NZ business fall behind our global counterparts.  For example, 80% of businesses in the US now use at least one cloud-based digital service, whereas in NZ it’s only 20%. It’s urgent that our small business community keep up with this global digital leap forward, or they’ll find it increasingly hard to keep up with the market and international e-commerce. 

Whether it is the $6.2 billion additional annual GDP that Xero and NZIER estimate will result from a 20% increase in cloud computing alone, or the $46.6 billion annual increase that Google estimates would be the result if New Zealand fully leveraged digital by 2030, there is a clear link between the adoption of digital ways of working, living and conducting business, and New Zealand’s economic recovery from the effects of COVID-19.

However, beyond COVID, there are significant sustainability and well-being benefits associated with the idea of a ‘Digital Aotearoa’. Digitalisation will make businesses and government more productive and enables both to take advantage of cutting-edge advances in technology and innovation. Those technologies facilitate domestic and international commerce without travel or contact, grow weightless goods and services exports, and support New Zealand’s emission reduction goals. It will also help New Zealanders live and work in a more sustainable and resilient way, and with a better work-life balance.  

For example, many Kiwi workers are choosing to work some time at home to reduce carbon emissions and be there for their families. And a 2020 Xero Small Business Insights report found that generally those small businesses using five or more digital apps in managing or operating their business experienced a one-third smaller drop in revenue and 40% fewer job losses than other small businesses during the COVID-19 crisis.

Self-employed and small businesses represent 97% of New Zealand’s business sector and employ more than 630,000 people.  Our small businesses can be the engine-room for adaptability, innovation, change and economic development. Accordingly, the government has initiated, working in partnership with small Kiwi tech businesses, the Digital Boost programme to accelerate the digitalisation of New Zealand small businesses and their people.

What is the Digital Boost programme?

Digital Boost is a government-funded programme focused on promoting and supporting more small business owners and their workers to make greater use of digital tools and adopt digital ways of working or conducting business.

The Digital Boost Skills Training and Support initiative is one of many initiatives across government focused on building digital confidence. This initiative is specifically focused on small businesses and tourism operators.  

MBIE has a large amount of research and insights into the rate of small business digitalisation, including some of the barriers to adoption. Small business owners told us they were time poor, required more skills and knowledge to access the benefits of digital, and wanted to make sure they are investing in the right tools and technology. They also wanted to see what other business owners in their own industry are doing. With these insights in mind, the Digital Boost programme was designed in partnership with the private sector, industry experts and small businesses to ensure it met the needs of small businesses.

The key initiatives in the Digital Boost programme are:

• Digital Boost Skills Training and Support – This initiative offers a range of free online courses on how to become a digital business. It aims to build on the skills, confidence and trust required to help small business owners realise the benefits of working digitally and/or with digital tools. The training is available to any small business who has begun to explore the digital world and wants to know “what good looks like”. MBIE partnered with the private sector to deliver this platform with a consortium involving leading Kiwi tech businesses (The MindLab, K&J Growth and Indigo)
  Visit: www.digitalboost.co.nz.

• Digital Boost Spotlight Series – These videos spotlight a range of small business owners who have recently transformed their business by adopting digital tools and digital ways of working. The businesses share their experiences to benefit other small business owners.
  www.business.govt.nz/do-business-online/digital-boost.

• Digital Boost Directory – The Right Tool – The Right Tool is a New Zealand digital applications and services marketplace that brings together a range of digital tools, technologies, products and services into a central place so small businesses owners can easily find what’s most suited to their needs. Businesses owners can also find ratings and evaluations of the various apps and digital tools. 
  www.therighttool.co.nz.

Are there any fundamental roadblocks remaining that continue to get in the way of New Zealand businesses going digital?

We tend to consider roadblocks as ‘barriers’ – and through our Better for Business Insights (December 2020), generally speaking, no one barrier appeared to stand out – with the majority of businesses seeing digital tools as relevant.

The main stated reason was a concern about internet security or fraud (32% agreed or strongly agreed). However, their own skills and concerns around cost, followed by not having enough time were the other main barriers. We have designed the modules within the Digital Boost Skills and Support platform to help address these barriers.

Another challenge faced by small business is finding suitable digital business advice, where many in the market are either tech people who aren’t strong in practical business or business people who don’t have sufficient working knowledge of the latest digital tools.

What are the consequences for SMEs of avoiding digitalising their business? 

There is a risk that Kiwi businesses think things will “go back to normal” when the COVID crisis declines.  However, the rate of digital acceleration around the globe will mean that expansion of e-commerce, digital banking, e-invoicing and general digital ways of working will be here to stay.  Customers are expecting the same levels of bespoke, responsive and adaptive service delivery that comes with digital business practices and data analytics.  Future workers will also have changing expectations and technical skills that will lead to differing work environment and technology expectations.

There has been a significant increase in internet shopping and social media marketing has become the common expectation. Having a clear understanding and profile of your customers enables constant adaption to their changing preferences.  Businesses that don’t engage cloud-based project management and other productivity tools will find that they will not be able to compete in the near future.

The Digital Boost Skills Training and Support programme has been divided into six streams. How did you identify which topics/themes to focus on? 

The six streams represent digital tools, websites, digital marketing, accounting, customer insights & business growth and future tech, and were developed through three different, cross-referenced sources.

The insights came from reoccurring themes of priority identified through a cross section of reports commissioned by New Zealand associations, agencies and private enterprise including MBIE, Xero, Yellow, BNZ, TUANZ, NZTech etc.

Secondly, The Mind Lab had significant experience in developing digital skills for the workplace and for small business owners through their microcredential in Digital Skills. This credential gained direct insights from the local SME market and the key areas of focus needed to assist these businesses adopt more digital tools, processes and channels.

Thirdly, the review of data from Google search terms and the analytics of the data showed us the categories that businesses were seeking advice from third party suppliers.

The six categories are high level focus areas that each contain many sub categories and learning modules. For example the category dedicated to Websites includes learning modules on Developing websites, Domain names, Search Engine Optimisation, E-commerce, Branding & Design and Communications and Autoresponders.

Content in each category is constantly evolving with new additions every month, with well over three hundred videos already available for business owners.

We also recognise that different businesses will be at different stages of their digital adoption journey, and the skills training initiative caters for this.

You’re four months into the Digital Boost campaign, what are you noticing that participating businesses are finding the most valuable so far?

The Digital Boost Skills Training and Support platform is where the training takes place – and we have some really good insights from participating businesses:

• Users have told us they really enjoy the bite sized nature of the learning content. It’s relevance for small businesses and the ability to fit learning journeys around other work or commitments.
• The variety of learning content and the mixture of ‘how-to’s’, real-world stories and Q&A sessions is providing the variety and optionality users are looking for. The ability to watch the Q&A sessions later under the ‘In Case You Missed It’ section has had super positive feedback as well. 
• Support is available 7 days a week and has allowed some users to tap into resource at a time that suits their availability alongside running a business. We see the greatest opportunity is the pastoral care wrapped around the programme – so small businesses can take that next step – whether it be growth or other positive change.

In terms of the content on the site – we have quite a varied experience level in our user base which we expected. For those starting out on their digital journey, they don’t generally know where to start its overwhelming! A number of users have commented on the relatability of the content and how we are guiding them through. These users generally start at the beginning with topics such as ‘The Basics of Branding’.

For those already on the journey, they are generally going to specific content that fits in with their digital plan. For example, those who already have a website may be interested in social media strategy. 

How are you planning on measuring longer term success of the programme? What are three of the key indicators that you’re looking at having an impact on? 

We are undertaking both comparative and longitudinal research to gauge the success of the programme – and to specifically look at:

• Changes in digital capabilities and behaviours of businesses.
• Differences between participants and non-participants of the programme
• Any relationships between digital behaviours and business productivity, wellbeing and satisfaction.

Some of the key indicators include:

• Digital index score – a measure out of 100 of both usage and attitudes towards digital tools – to objectively measure to what degree businesses enhance their digital capabilities
• Financial performance – can we identify any links between digital capability and productivity?
• Wellbeing metrics – previous research illustrated a relationship between digital capability and positive wellbeing of business owners/managers.
• Satisfaction with business performance – ie. does being more digital help owners feel more satisfied in how their business operates in general?

Read our interview with the Mind Lab founder Frances Valintine about their involvement in the Digital Boost programme here.

Read Craig Hudson’s piece on why we need to get technology in the hands of small Kiwi businesses here.