1 00:00:04,080 --> 00:00:06,390 Sean Aylmer: Welcome to the Fear and Greed Daily Interview, I'm Sean 2 00:00:06,450 --> 00:00:10,859 Sean Aylmer: Aylmer. Young people aren't owning businesses, instead choosing to leave 3 00:00:10,860 --> 00:00:14,339 Sean Aylmer: them for older Australians, according to new research from CPA 4 00:00:14,429 --> 00:00:18,360 Sean Aylmer: Australia. In fact, our business owners are the oldest in Asia- 5 00:00:18,360 --> 00:00:21,060 Sean Aylmer: Pacific with a real focus on the 50 plus age 6 00:00:21,060 --> 00:00:24,090 Sean Aylmer: group. Gavan Ord is the Senior Manager of Business and 7 00:00:24,090 --> 00:00:28,200 Sean Aylmer: Investment Policy for CPA Australia, the country's leading professional accounting 8 00:00:28,200 --> 00:00:29,880 Sean Aylmer: body. Gavan, welcome to Fear and Greed. 9 00:00:30,509 --> 00:00:31,290 Gavan Ord: Thank you for having me. 10 00:00:31,740 --> 00:00:34,469 Sean Aylmer: Now, people might say this is a bad thing, but 11 00:00:34,469 --> 00:00:38,040 Sean Aylmer: as a 50 plus person myself, I'm delighted that my 12 00:00:38,040 --> 00:00:41,309 Sean Aylmer: generation is entrepreneurial. Is that a fair take? 13 00:00:41,729 --> 00:00:45,659 Gavan Ord: Well, it's not a bad thing, but the data from 14 00:00:45,659 --> 00:00:49,769 Gavan Ord: our survey shows, and we've been running the survey since 2009, 15 00:00:49,769 --> 00:00:54,899 Gavan Ord: that older business owners are less likely to run businesses 16 00:00:54,900 --> 00:00:59,160 Gavan Ord: that are growing, less likely to be creating jobs, less 17 00:00:59,160 --> 00:01:02,729 Gavan Ord: likely to be using technology such as e- commerce and 18 00:01:02,730 --> 00:01:07,110 Gavan Ord: social media, less likely to be innovating and less likely 19 00:01:07,110 --> 00:01:08,250 Gavan Ord: to be exporting. 20 00:01:08,730 --> 00:01:12,688 Sean Aylmer: Oh, Gavan, you've just deflated my ego enormously here, but that's a fair point, 21 00:01:13,049 --> 00:01:18,420 Sean Aylmer: that's a fair point. So what about younger Australians? Why 22 00:01:18,420 --> 00:01:22,680 Sean Aylmer: aren't they as entrepreneurial perhaps as the older ones? 23 00:01:23,160 --> 00:01:26,969 Gavan Ord: Well, that's a really great question, Sean. It's something that we've 24 00:01:26,969 --> 00:01:30,359 Gavan Ord: been thinking about a lot. So we did a follow- 25 00:01:30,359 --> 00:01:34,169 Gavan Ord: up poll with our members on LinkedIn, and from that 26 00:01:34,170 --> 00:01:38,759 Gavan Ord: poll, our members chose three top issues. One, the first 27 00:01:38,760 --> 00:01:44,490 Gavan Ord: one was just problems in accessing capital to fund starting a 28 00:01:44,580 --> 00:01:48,570 Gavan Ord: business, the second one was work- life balance, and the 29 00:01:48,570 --> 00:01:52,920 Gavan Ord: third one was job security and the uncertainty of actually 30 00:01:52,920 --> 00:01:54,240 Gavan Ord: starting a small business. 31 00:01:55,590 --> 00:01:57,840 Sean Aylmer: I mean, is this new or have we been heading 32 00:01:57,840 --> 00:01:58,800 Sean Aylmer: for this for a while? 33 00:01:59,880 --> 00:02:02,039 Gavan Ord: It's something, when we've looked back at the survey data 34 00:02:02,549 --> 00:02:05,039 Gavan Ord: over the last 14 years, it's been the case for 35 00:02:05,039 --> 00:02:09,870 Gavan Ord: that long and probably longer. And it's a real concern 36 00:02:09,870 --> 00:02:12,750 Gavan Ord: to us, not so much that there's a lot of 37 00:02:12,840 --> 00:02:16,530 Gavan Ord: older Australians running small businesses, the concern to us is 38 00:02:17,160 --> 00:02:20,340 Gavan Ord: not enough young Australians are coming into small business, starting 39 00:02:20,340 --> 00:02:22,379 Gavan Ord: a small business, buying a small business. 40 00:02:23,369 --> 00:02:27,750 Sean Aylmer: Okay. So is this startups as well as purchasing an ongoing business? 41 00:02:27,750 --> 00:02:28,920 Sean Aylmer: Is that what the survey's showing? 42 00:02:29,730 --> 00:02:33,719 Gavan Ord: That's right. It's not just about startups, it's about purchasing 43 00:02:33,719 --> 00:02:37,290 Gavan Ord: existing business, it's about starting your own business. So it's 44 00:02:37,290 --> 00:02:42,089 Gavan Ord: across the board that younger Australians are much less likely 45 00:02:42,090 --> 00:02:45,540 Gavan Ord: than people in Asia to start a small business or 46 00:02:45,540 --> 00:02:47,040 Gavan Ord: want to start a small business. 47 00:02:47,519 --> 00:02:49,769 Sean Aylmer: Okay, so what are we missing out on? What's the size 48 00:02:49,770 --> 00:02:53,250 Sean Aylmer: of the prize that we're not getting because of this? 49 00:02:53,790 --> 00:02:57,750 Gavan Ord: The prize is, and when we look at comparable economies 50 00:02:57,750 --> 00:03:02,220 Gavan Ord: to Australia like, say, Singapore and Hong Kong, they've got 51 00:03:02,250 --> 00:03:05,429 Gavan Ord: many more younger people running small businesses in those markets. 52 00:03:06,240 --> 00:03:09,630 Gavan Ord: What we do see in those markets is more businesses 53 00:03:09,630 --> 00:03:13,858 Gavan Ord: that are growing, more businesses that are innovating, more businesses that 54 00:03:13,950 --> 00:03:16,379 Gavan Ord: are creating jobs. So what are we missing out on? 55 00:03:16,980 --> 00:03:19,169 Gavan Ord: If you look at it from a macroeconomic point of 56 00:03:19,169 --> 00:03:22,320 Gavan Ord: view, economic growth is probably not as high as what 57 00:03:22,320 --> 00:03:26,549 Gavan Ord: it could be. The job creation is not as strong 58 00:03:26,550 --> 00:03:29,369 Gavan Ord: as what it could be, and we're not as innovative 59 00:03:29,700 --> 00:03:31,530 Gavan Ord: or productive as what it could be. And as you 60 00:03:31,530 --> 00:03:35,459 Gavan Ord: know, recently, there's been a few reports around about Australia's 61 00:03:35,459 --> 00:03:38,670 Gavan Ord: low productivity growth. And I think part of that is 62 00:03:38,670 --> 00:03:43,560 Gavan Ord: because we're just not getting through those young entrepreneurial people 63 00:03:43,590 --> 00:03:45,060 Gavan Ord: into the small business sector. 64 00:03:45,750 --> 00:03:47,759 Sean Aylmer: Okay, so how do we change that? Is it a 65 00:03:47,759 --> 00:03:48,570 Sean Aylmer: role for government? 66 00:03:49,710 --> 00:03:51,660 Gavan Ord: Yeah. So how do we change it? That's something we've 67 00:03:51,660 --> 00:03:55,830 Gavan Ord: been thinking about as well, and we didn't have any 68 00:03:56,250 --> 00:03:59,610 Gavan Ord: one answer. I don't think there's a silver bullet. What we 69 00:03:59,610 --> 00:04:02,580 Gavan Ord: are asking for is the government to start a public 70 00:04:02,580 --> 00:04:06,720 Gavan Ord: inquiry to look at that issue and to consider, firstly, 71 00:04:07,259 --> 00:04:12,059 Gavan Ord: why aren't younger people going into small business in the numbers 72 00:04:12,059 --> 00:04:14,340 Gavan Ord: that they should? So what are the barriers to investing 73 00:04:14,340 --> 00:04:17,940 Gavan Ord: in and starting a business? And once we have identified 74 00:04:17,940 --> 00:04:20,188 Gavan Ord: those barriers, we're in a better position to start to 75 00:04:20,190 --> 00:04:25,110 Gavan Ord: look at potential solutions, whether that's government policy or existing 76 00:04:25,110 --> 00:04:28,080 Gavan Ord: business owners, and what they can do to bring in 77 00:04:28,080 --> 00:04:30,178 Gavan Ord: more younger people into their business. 78 00:04:31,589 --> 00:04:34,800 Sean Aylmer: Is there a cultural element in this? Mind you, if 79 00:04:34,800 --> 00:04:37,560 Sean Aylmer: you're saying compared to Singapore and Hong Kong, I mean, 80 00:04:37,560 --> 00:04:40,890 Sean Aylmer: I would've thought Singaporeans as a group were probably more 81 00:04:40,920 --> 00:04:43,620 Sean Aylmer: conservative. That might be unfair really to say that, but 82 00:04:43,830 --> 00:04:46,529 Sean Aylmer: is it a cultural element in that people just don't 83 00:04:46,529 --> 00:04:47,428 Sean Aylmer: want to take the risk? 84 00:04:47,879 --> 00:04:53,400 Gavan Ord: Look, that's something I've been looking at myself. And what 85 00:04:53,400 --> 00:04:55,169 Gavan Ord: we do find when we talk to members, and we've 86 00:04:55,170 --> 00:05:00,839 Gavan Ord: got members all over Asia as well as Australia, is there definitely is a cultural element 87 00:05:00,900 --> 00:05:05,159 Gavan Ord: that going into business is seen as a normal career 88 00:05:05,160 --> 00:05:08,520 Gavan Ord: option in many parts of Asia. And it's just not 89 00:05:08,520 --> 00:05:12,750 Gavan Ord: something that people in university and high school talk about. 90 00:05:12,839 --> 00:05:15,178 Gavan Ord: They talk about, " I'm going to go off and work 91 00:05:15,178 --> 00:05:18,539 Gavan Ord: for a large corporate," " I'm going to go off and work for 92 00:05:18,928 --> 00:05:22,889 Gavan Ord: government." We rarely hear people talk about going off and 93 00:05:22,889 --> 00:05:26,610 Gavan Ord: starting their own business. But when I go to Asia and 94 00:05:26,610 --> 00:05:29,370 Gavan Ord: when I talk to members in Asia, starting a business 95 00:05:29,370 --> 00:05:33,599 Gavan Ord: is something very much culturally embedded in many parts of 96 00:05:33,599 --> 00:05:36,450 Gavan Ord: Asia. And I think part of that is being a 97 00:05:36,450 --> 00:05:40,919 Gavan Ord: business person is seen as a pathway to success. Whereas 98 00:05:40,920 --> 00:05:44,850 Gavan Ord: in Australia, I don't think that that element of running a 99 00:05:44,850 --> 00:05:48,779 Gavan Ord: business and success is as strongly held as it is 100 00:05:48,779 --> 00:05:49,260 Gavan Ord: in Asia. 101 00:05:50,639 --> 00:05:52,440 Sean Aylmer: Stay with me, Gavan. We'll be back in a minute. 102 00:05:58,680 --> 00:06:01,980 Sean Aylmer: My guest this morning is Gavan Ord from CPA Australia. 103 00:06:03,210 --> 00:06:06,120 Sean Aylmer: Okay, now, one of the statistics from your survey is 104 00:06:06,120 --> 00:06:09,719 Sean Aylmer: about the low level of digital capability. And I would've 105 00:06:09,719 --> 00:06:15,360 Sean Aylmer: thought digital capability was just it's fundamental, table stakes, to 106 00:06:15,570 --> 00:06:19,169 Sean Aylmer: any business nowadays. How big a problem is that? 107 00:06:19,920 --> 00:06:24,570 Gavan Ord: We would start off by saying many Australian businesses use 108 00:06:24,570 --> 00:06:27,960 Gavan Ord: accounting software, so there's very high levels of uptake of 109 00:06:27,960 --> 00:06:29,188 Gavan Ord: certain technologies. 110 00:06:29,520 --> 00:06:29,789 Sean Aylmer: Yep. 111 00:06:30,150 --> 00:06:33,960 Gavan Ord: But primarily we find that they're doing that for compliance reasons. 112 00:06:34,529 --> 00:06:37,170 Gavan Ord: They have their accounting software to help them with their payroll, 113 00:06:37,260 --> 00:06:40,470 Gavan Ord: to help them with their quarterly BAS. That's the first step, 114 00:06:40,529 --> 00:06:43,950 Gavan Ord: but they're not making the next step. And that the next step is 115 00:06:44,460 --> 00:06:49,469 Gavan Ord: around e- commerce, it's about social media, it's about new 116 00:06:49,469 --> 00:06:54,539 Gavan Ord: payment technologies. So they do have their computers, they do have 117 00:06:54,540 --> 00:06:58,350 Gavan Ord: their point of sale equipment, but they're not making that 118 00:06:58,410 --> 00:07:03,120 Gavan Ord: next step up in comparison to many businesses in Asia. Now, 119 00:07:03,330 --> 00:07:08,759 Gavan Ord: while this is coming across as quite a negative response, 120 00:07:08,759 --> 00:07:11,189 Gavan Ord: what I will say though is that over the last 121 00:07:11,190 --> 00:07:14,280 Gavan Ord: few years in Australia, there has been an uptick in 122 00:07:14,730 --> 00:07:18,390 Gavan Ord: small businesses selling online, small businesses using social media. So there 123 00:07:19,050 --> 00:07:23,099 Gavan Ord: have been improvements, but when we draw the comparison to 124 00:07:23,099 --> 00:07:25,889 Gavan Ord: the other 10 markets we look at, Australia is still 125 00:07:25,889 --> 00:07:29,729 Gavan Ord: at the bottom on both of those measures of online 126 00:07:29,730 --> 00:07:32,040 Gavan Ord: sales and social media. 127 00:07:33,000 --> 00:07:36,180 Sean Aylmer: What about around cyber risk, cybersecurity? 128 00:07:36,810 --> 00:07:40,860 Gavan Ord: So because of the low uptake of technology, it's not 129 00:07:40,860 --> 00:07:46,350 Gavan Ord: really surprising that Australian small businesses are not as worried 130 00:07:46,350 --> 00:07:50,070 Gavan Ord: about cyber risks as they are in Asia. So the 131 00:07:50,070 --> 00:07:54,390 Gavan Ord: expectations around being cyberattacked in Australia is lower than the 132 00:07:54,390 --> 00:07:58,259 Gavan Ord: survey average. But on the positive side is even though 133 00:07:58,290 --> 00:08:01,469 Gavan Ord: Australian small businesses are not necessarily thinking they'll be cyber 134 00:08:01,469 --> 00:08:05,339 Gavan Ord: attacked, they're pretty good at actually checking their cybersecurity. So 135 00:08:05,339 --> 00:08:09,960 Gavan Ord: I think there's a positive there that they do understand the 136 00:08:09,960 --> 00:08:13,860 Gavan Ord: risks. And we do know, over the last six months 137 00:08:13,860 --> 00:08:17,729 Gavan Ord: in particular, after some of the large hacks that have 138 00:08:17,730 --> 00:08:21,509 Gavan Ord: happened recently, that I think cybersecurity and data governance is 139 00:08:21,509 --> 00:08:24,659 Gavan Ord: front of mind for many people and many businesses, small as well. 140 00:08:25,740 --> 00:08:31,110 Sean Aylmer: Okay. What about things like the survey talks about social 141 00:08:31,110 --> 00:08:33,779 Sean Aylmer: media and how many small businesses don't use social media? 142 00:08:34,260 --> 00:08:36,718 Sean Aylmer: I mean, it's almost the third, which surprised me somewhat, 143 00:08:37,620 --> 00:08:41,400 Sean Aylmer: in 2023, that social media isn't front and center more. 144 00:08:42,540 --> 00:08:45,990 Gavan Ord: And we ask, do you use social media for recruiting? 145 00:08:45,990 --> 00:08:48,870 Gavan Ord: Do you use social media to sell? So it's not 146 00:08:48,870 --> 00:08:52,260 Gavan Ord: just using social media for promotion. But where we do talk 147 00:08:52,830 --> 00:08:55,799 Gavan Ord: to businesses that have said, " Oh, we don't use social 148 00:08:55,799 --> 00:08:59,699 Gavan Ord: media," we asked them why not, and they said, " Well, I 149 00:08:59,699 --> 00:09:03,090 Gavan Ord: use social media to talk to my grandkids, I use 150 00:09:03,090 --> 00:09:06,900 Gavan Ord: social media to talk to my kids." It's not something they necessarily 151 00:09:06,900 --> 00:09:09,870 Gavan Ord: understand how to apply it in their business. And I 152 00:09:09,870 --> 00:09:13,590 Gavan Ord: think that's maybe where there is an opportunity for more 153 00:09:13,590 --> 00:09:16,799 Gavan Ord: information around how can you use social media in your 154 00:09:16,799 --> 00:09:19,920 Gavan Ord: business to engage with your customers, to engage with your 155 00:09:19,920 --> 00:09:23,699 Gavan Ord: potential customers, and look at it more broadly than just 156 00:09:23,700 --> 00:09:25,950 Gavan Ord: as something they can use personally. 157 00:09:26,849 --> 00:09:29,340 Sean Aylmer: As a media organization, we tend to focus on some 158 00:09:29,340 --> 00:09:31,078 Sean Aylmer: of these negatives, but there's some positives out of the 159 00:09:31,080 --> 00:09:32,520 Sean Aylmer: survey too. And the one I really liked is that 160 00:09:32,520 --> 00:09:36,750 Sean Aylmer: almost half of small businesses grew last year. That's got 161 00:09:36,750 --> 00:09:39,390 Sean Aylmer: to be good news for the economy and also for 162 00:09:39,390 --> 00:09:42,390 Sean Aylmer: encouraging people of all ages to get involved. 163 00:09:42,929 --> 00:09:47,309 Gavan Ord: Yeah, there's definitely positives, and this year was the best 164 00:09:47,309 --> 00:09:51,419 Gavan Ord: year for Australian small businesses in five years. So for 165 00:09:51,420 --> 00:09:54,690 Gavan Ord: us, that was a good result, and, well, the results 166 00:09:54,690 --> 00:09:58,650 Gavan Ord: show that 2023 this year will be maybe somewhat more 167 00:09:58,650 --> 00:10:02,790 Gavan Ord: positive. So I think there's definitely some positive elements. As 168 00:10:02,790 --> 00:10:05,760 Gavan Ord: I said before, there's been a bit of an uptick 169 00:10:05,849 --> 00:10:10,319 Gavan Ord: in use of social media, in use of online sales, and 170 00:10:10,320 --> 00:10:13,588 Gavan Ord: they're the building blocks for future growth, so there's definitely 171 00:10:13,590 --> 00:10:16,770 Gavan Ord: some positives in there. And if you are looking into 172 00:10:16,770 --> 00:10:20,670 Gavan Ord: business, if you are looking to start your own business, 173 00:10:20,670 --> 00:10:22,620 Gavan Ord: I'd encourage you to have a look at the survey 174 00:10:22,620 --> 00:10:26,968 Gavan Ord: results. There is a lot of survey data there, but what it does show 175 00:10:27,809 --> 00:10:32,820 Gavan Ord: is what are the characteristics of high growth businesses? So if 176 00:10:32,820 --> 00:10:34,950 Gavan Ord: you're running a business or looking to start a business, 177 00:10:35,550 --> 00:10:37,500 Gavan Ord: it gives you a pretty good insight into what you 178 00:10:37,500 --> 00:10:39,870 Gavan Ord: need to look at if you aspire to run a high- 179 00:10:39,870 --> 00:10:40,740 Gavan Ord: growth business. 180 00:10:41,370 --> 00:10:43,320 Sean Aylmer: You have to give us a little insight into that 181 00:10:43,320 --> 00:10:45,779 Sean Aylmer: one now, Gavan, what is it? What should we be 182 00:10:45,780 --> 00:10:46,740 Sean Aylmer: aspiring to be doing? 183 00:10:47,458 --> 00:10:52,439 Gavan Ord: Well, the survey data says you should be selling online, you should 184 00:10:52,440 --> 00:10:55,770 Gavan Ord: be focused in on customer satisfaction, you should be looking 185 00:10:55,770 --> 00:11:01,020 Gavan Ord: to improve your business management, innovating and looking at exporting. 186 00:11:01,200 --> 00:11:04,440 Gavan Ord: So I think they're the five or six key factors 187 00:11:04,440 --> 00:11:08,310 Gavan Ord: which really distinguish a high- growth business from other businesses. 188 00:11:08,550 --> 00:11:10,800 Sean Aylmer: Fantastic. Gavan, thank you for talking to Fear and Greed. 189 00:11:11,580 --> 00:11:12,150 Gavan Ord: Thank you, Sean. 190 00:11:12,720 --> 00:11:15,210 Sean Aylmer: That was Gavan Ord, the Senior Manager of Business and 191 00:11:15,210 --> 00:11:18,899 Sean Aylmer: Investment Policy for CPA Australia. This is the Fear and 192 00:11:18,900 --> 00:11:20,939 Sean Aylmer: Greed Daily Interview. Join us every morning for the full 193 00:11:20,940 --> 00:11:24,270 Sean Aylmer: episode of Fear and Greed, Australia's most popular business podcast. 194 00:11:24,510 --> 00:11:26,338 Sean Aylmer: I'm Sean Aylmer, enjoy your day.