Why open source is key to boosting Australia’s SME ecosystem

Australia’s SMEs are facing a productivity crunch, which can often be attributed to an inability to scale output efficiently and in a way that lends itself to more innovative products and services.

The problem is that digital transformation is an arduous, resource-expensive endeavour and is particularly challenging for SMEs who are struggling to keep the lights on in the current economic conditions. Most of all, it relies heavily on one key component: developer talent.

Compounding this is the fact that SMEs are in a perpetual battle for talent against larger enterprises who have the capacity to offer better employee incentives, workflows, and tools, leading developers to often seek career opportunities in the big end of town, rather than with a smaller business.

But by leaning into open source software to accelerate the speed of innovation, boost collaboration, enhance security, optimise software reliability, and – inevitably – improve the quality of services, SMEs can stay ahead of the curve. To software developers, this is obvious. But all too often, it is not as clear to business leaders. Here’s why SMEs should get serious about an open-source-led approach to productivity and innovation.

Innovation’s secret weapon

As the Productivity Commission’s 2023 report points out, ensuring businesses have access to innovative concepts through idea sharing is vital in boosting their productivity. In this sense, productivity and innovation are intrinsically linked; innovating ways to streamline workflows enhances productivity, and more productivity supports the development of more innovative products and services.

By the same token, tapping into the collective power of a global community of millions of developers collaborating together can significantly help SMEs and their stretched developer teams stay agile and competitive. This can be a huge advantage for small businesses that may only have a handful of developers. The ability for software developers to leverage existing code — that’s pre-tested — means SMEs don’t have to reinvent the wheel.

The underlying benefits of an open-source approach

Perhaps the most tangible benefit is the fact that open-source software is largely free to use, meaning SMEs don’t have to break the bank to leverage it. With costs being the biggest barrier to digital engagement for SMEs, open source presents a tangible opportunity for them to get ahead.

The flexibility provided by a vast array of open-source tools to suit any business need means developers have more freedom over how they build technology stacks, products, and services. This should not go unnoticed as flexibility is one of the most important factors that developers look for in a workplace.

Additionally, with an evolving global cyber threat landscape and a significant uptick in attacks against Australian businesses, concerns around whether or not software is secure are front of mind for SMEs who may not be able to afford best-of-breed cybersecurity tools. Open source helps keep businesses secure as the open source community’s collective responsibility for developing and maintaining secure code makes it far less likely to have vulnerabilities compared to private, proprietary code.

Perhaps most excitingly, software development is entering a new era that will fast-track business innovation even further. Open source has been at the core of AI development and the convergence of open source software and AI has the ability to deliver the impact of generative AI to any organisation with the vision to implement it, driving productivity and powering innovation in a virtually limitless number of ways.

As SMEs strive to drive growth and remain competitive, they are confronted with the triple challenge of declining productivity, the cost of doing business, and the looming threat of cyber attacks. Leveraging open-source software is key to overcoming these daunting hurdles and is fundamental in ensuring the long-term prosperity of the Australian SME ecosystem.