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Australian businesses risk lagging behind their Asia-Pacific counterparts due to slow adoption of emerging technologies, including artificial intelligence (Ai). CPA Australia’s 2024 Business Technology Report highlights significant gaps in digital strategy and Ai implementation across the region, urging Australian firms to prioritize technological advancements to remain competitive.
Digital Strategy Disparities
The report reveals that only 53 per cent of Australian businesses have implemented a digital strategy, a stark contrast to the 69 per cent of businesses in other Asia-Pacific countries such as China, Hong Kong, and Singapore. The presence of a digital strategy is closely linked to business profitability, with nearly 70 per cent of companies with such a plan reporting increased profits in their most recent financial year. In comparison, only 35 per cent of businesses without a digital strategy reported profit growth.
Gavan Ord, Business Investment Lead at CPA Australia, emphasized the importance of adopting new technologies. “The research shows a clear correlation between the use of new technology and business success. Companies that integrate a variety of technologies are more likely to be profitable and efficient. It’s crucial for Australian businesses to adopt technologies that suit their needs quickly to maintain competitiveness in a challenging environment.”
Ai Adoption Lags Behind
The report also points to a lag in Ai adoption among Australian businesses. Just 22 per cent of Australian firms have embraced Ai to a moderate or significant extent, compared to 41 per cent in other Asia-Pacific markets. A concerning 34 per cent of Australian businesses have never used Ai, compared to only 22 per cent across the region.
“While there is growth in the number of Australian businesses using Ai, it’s not yet a routine tool for most,” said Ord. “Local businesses are clearly behind in exploring Ai’s potential to enhance efficiency and overall performance. Adopting technologies and understanding their potential is critical. Ai might not be the answer for every business, but for some, it could be transformative.”
Strength in Cybersecurity
Despite these shortcomings, Australian businesses excel in areas like cybersecurity and data protection. Over two-thirds (68 per cent) of Australian respondents identified increased cybersecurity protection as their top technology initiative in the past year, compared to 51 per cent in other markets. Additionally, 54 per cent of Australian businesses rate their cybersecurity proficiency as above average, versus 48 per cent in other countries.
Australian businesses also place a high priority on the accuracy, security, and privacy of financial data, with 76 per cent of respondents indicating a strong focus in this area, compared to 64 per cent in other Asia-Pacific markets.
ESG and Sustainability Efforts
The report highlights a gap in the use of technology to support environmental, social, and governance (ESG) initiatives among Australian businesses. Only 11 per cent of Australian firms use technology to monitor energy usage, waste, and emissions, compared to 18 per cent in other Asia-Pacific markets. Similarly, just 10 per cent of Australian businesses employ technology for sustainability performance reporting, while 31 per cent of their regional counterparts do so. Moreover, only 9 per cent use technology to identify sustainability-related risks and opportunities, compared to 33 per cent in other countries.
“Australian businesses can learn a lot from their Asia-Pacific counterparts,” Ord said. “Being open to new technologies and innovative operational methods is essential for business success. Standing still in the tech space can quickly result in being left behind.”
CPA Australia’s Recommendations
CPA Australia advises Australian businesses to develop and implement a digital strategy focused on enhancing productivity and customer experience. Investing in technology that converts quality data into actionable insights, such as Ai and data analytics software, is also recommended. Businesses should consider technologies that support sustainability goals, including tools that assist with ESG compliance. Additionally, identifying opportunities to improve operational efficiency and customer experience through Ai is encouraged. Finally, CPA Australia stresses the importance of regularly reviewing technology investments for return on investment, relevance, and effectiveness, rather than simply following technological trends.
The report serves as a wake-up call for Australian businesses, highlighting the need for swift action in adopting new technologies to avoid falling further behind in the competitive Asia-Pacific market.
Last Updated on August 26, 2024 by Nick Ross
