Access to skills and funding will be crucial for small- and medium-sized technology businesses in a post-pandemic world, according to a new report.
Macquarie’s Banking and Financial Services Group’s inaugural Technology Pulse Check 2021, conducted with the help of FiftyFive5 between August and September 2020, surveyed more than 130 SME technology businesses, including those in enterprise software (SaaS) IT services, consulting and digital infrastructure.
The survey analysed the performance and identified opportunities for growth in the sector. It found that the top challenges technology businesses anticipate in the next 12 months are accessing growth funds (27 per cent) and attracting key talent in sales, business development and tech support (21 per cent).
The research also noted that 72 per cent of businesses reported growing revenue and 63 per cent turned a profit. Despite this, many businesses still remain concerned about the impact of COVID-19, with 55 per cent of respondents saying that obtaining capital from private investors is a focus for the next 12 months, compared to 28 per cent of businesses who saw it as a focus of the past 12 months. A third of respondents also cited that approach to people management was a significant challenge.
Evan Hinchliffe, Macquarie Business Banking Technology Industry Lead, said that it was pleasing to see that Australian technology businesses had generally performed well despite enduring the same challenges and uncertainties as other sectors in 2020, a testament to their ability to quickly adapt to new conditions and identify opportunities for growth.
“At a time when some industries remained in survival mode, technology businesses began accelerating their operations to meet increased demand as workforces quickly shifted to remote ways of working and customers required technological solutions to keep operating,” Hinchliffe said.
He highlighted the fact that nearly three-quarters of the technology businesses surveyed reported growing revenues, and when “flat was the new up”, almost two-thirds reported turning a profit which is significant given the state of the Australian economy at the time of the survey. He warned, however, that sustainable growth remains a challenge.
“Despite being among the nation’s most innovative industries, accessing capital is still a significant challenge for technology businesses,” Hinchliffe said. “But what’s positive to see is that many businesses have recognised this and are doubling down on making it a priority in 2021. More than half intend to obtain funding from private investors in the next 12 months, which is close to double the number of businesses who said it was a focus from a year ago.
“There are encouraging signs that technology businesses are starting to place more importance on their people to create supportive and adaptive workplaces,” Hinchliffe added. “According to the report, 93 per cent of businesses reported they already have a diversity strategy in place and are actively encouraging more diverse teams for their problem-solving abilities.”