Amid ongoing challenges, more small and medium-sized enterprises (SMEs) in Australia are strategically investing in technology, infrastructure, and talent to adapt to an evolving economic landscape.
This is the insight from the 2024 SME Spend Barometer report from Instarem, part of Southeast Asian fintech Nium, which looked at the spending behaviours of SMEs in Singapore, Australia, and Malaysia.
The report noted that export payments increased by six per cent, particularly in Australia and Malaysia, indicating a cautious yet optimistic approach to global expansion.
Yogesh Sangle, Global Head of Instarem, commented, “Expanding overseas allows SMEs to tap into broader customer bases and unlock market opportunities to achieve scale and growth. While a degree of caution is understandable in today’s climate, we anticipate that SMEs will continue to identify and seize opportunities that align with their goals.”
The report also found that digital transformation and AI adoption are accelerating across APAC as reflected in a 29 per cent increase in spending on information services compared to the same period in 2023, with Malaysia and Australia leading the charge in adapting digital tools, AI, and automation to address rising costs and improve efficiency.
There is also a marked reinvestment in physical infrastructure after years of hybrid or remote work, with 16 per cent growth in office expenses. In particular, an increased demand in commercial real estate may have led to more than doubling of transaction volumes in real estate and leasing (+107 per cent) from 2023 to 2024.
However, some sectors such as industrial manufacturing and construction (-48 per cent), online retail (-44 per cent) and telecommunications (-28 per cent) are bucking the reinvestment trend in favour of a more cautious approach driven by specific market needs.
“Employee demand for in-office collaboration has driven our decision to invest in physical office spaces in the Philippines and Vietnam. Balancing these investments with our offshoring model allows us to better manage costs while fostering greater collaboration and innovation,” said George Votava, Group Managing Director at Net Fusion Technology.
The research also noted that SMEs aren’t scaling back on talent investments, with salary payments up seven per cent. In Australia, salary payments among SMEs rose modestly (+3 per cent), in line with the country’s Wage Price Index and the National Minimum Wage increase of 3.75 per cent, suggesting that businesses are prioritising competitive pay and retaining critical talent while carefully managing costs.
In addition, SMEs are focusing on high-impact investments like digital transformation while adopting measured strategies in other areas, though challenges such as fluctuating exchange rates and high processing fees continue to pressure resources.
“Managing costs is a top priority for SMEs, particularly in critical areas like talent and expansion,” said Sangle. “Thinking strategically about payments can not only help to reduce high cross border fees and improve cashflow – it can free up crucial resources for growth and set SMEs up for long-term success.”
