Australian small business growth drops to 10th place in APAC

Low growth expectations and a lack of confidence in the future are just two of the trends revealed in the latest CPA Australia Asia Pacific Small Business Survey.

Australia’s small businesses are facing a tough road ahead, according to CPA Australia’s research, which sees Australia slip down the ranks to 10th out of 11 countries for growth in the Asia Pacific region.

The CPA survey paints a worrying image of Australian small business life. Only 42 per cent of Australian small businesses reported growth in the past 12 months, compared to 64 per cent across the Asia-Pacific. Looking ahead, just 55 per cent of Australian businesses expect growth in 2025, again, well below the regional average of 71 per cent.

Regulation, red tape and tech lagging behind

The survey implies one of the biggest hurdles for Australian small businesses is excessive regulation, which is holding back innovation and growth. Gavan Ord, CPA Australia’s Business Investment and International Lead, suggested that the government’s lack of support for digital adoption is another key issue.

“Australia’s small businesses are held back by insufficient government support for digital adoption and excessive red tape. We need a major shift in how our leaders approach small business,” he said.

The survey also showed that only 39 per cent of Australian businesses report earning more than 10 per cent of their revenue online, well below the regional average of 67 per cent. This highlights the tech gap, with many small businesses failing to take full advantage of digital opportunities that could help them grow.

Job creation and growth expectations hit rock bottom

It’s not just growth that’s lagging: job creation is also down. Just 9 per cent of Australian small businesses added new staff last year, compared to a third (33 per cent) in other parts of the Asia-Pacific. Looking to 2025, Australian businesses are also among the least likely to increase their workforce.

“The outlook for jobs in 2025 is bleak. Small business owners are feeling cautious and risk-averse, which is holding back their potential for growth and job creation,” Ord siad.

The call for action: look to Singapore’s success

CPA Australia is calling on the next federal government to take decisive action to support small businesses. One potential model is Singapore, where the government has invested heavily in digital support services. Singapore recently allocated $150 million to help businesses adopt AI, which has had a direct impact on technology adoption and business growth.

Ord says Australia could learn a lot from its Asian neighbours.

“Emerging technologies are driving economic growth in other markets, and our research shows that government investment is paying off. Australian businesses have fallen behind, and we need a comprehensive plan to fix this.”

Small business’s risk-averse culture

Australian small business owners are also more risk-averse than their counterparts in other regions. Older business owners, in particular, prefer stability overtaking chances on new opportunities, which may be contributing to their lower growth expectations.

The survey also highlighted that Australian small businesses are less likely to seek professional advice compared to other regions. Only 21.3 per cent sought advice in 2024, which could explain their conservative approach to growth and innovation.

With low growth expectations, limited appetite for risk, and a lack of support for digital adoption, Australian small businesses are facing a challenging year ahead. CPA Australia is urging the next federal government to act fast and support businesses through regulatory reform, better digital infrastructure, and a shift in how small business is supported at all levels of government.

Without change, the CPA warns that Australia’s small businesses will continue to fall behind, both in terms of growth and innovation.

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