Accelerated digital adoption shields firms from pandemic’s worst, helps keep 3.2M Australians working

Exactly six months ago, many Australian businesses were forced to temporarily shut their doors to customers and employees due to COVID-19 restrictions. By accelerating their use of digital technologies – such as ecommerce and video conferencing – many kept operating and kept employees working through the crisis.

A report released today by AlphaBeta (part of Accenture), in partnership with Microsoft, provides new insight on the impact of the new technologies adopted during COVID on Australian business and workers.

The report – How technology strengthened Australian business during COVID and beyond – shows that a by-product of the COVID pandemic has been the chance to experiment with technologies that could lead to more resilient businesses and more productive workers.

Key findings include:

• Australian businesses rapidly accelerated technology adoption during COVID – implementing as much of some technologies in 2020 as they had in the past 10 years.
• Australian businesses that used more technology were more resilient through the COVID crisis. More tech-advanced firms had more resilient revenues, were more likely to maintain employment and had more resilient profitability through the crisis.
• By enabling remote working, collaboration technologies helped to keep 3.2 million Australians working who would otherwise have been unable to continue to work safely. It also prevented 1.6 million Australians from potentially being furloughed from their jobs with the introduction of social distancing rules.
• Remote working delivered a range of productivity outcomes depending on the type of work and the circumstances of the worker. But productivity was three times higher in firms that explicitly adapted their workplace to remote working, including by providing additional training, introducing new management practices, supplying extra pastoral care and supplying new equipment for workers at home.

The report is based on a range of data sources including the Business Characteristics Survey of the ABS and a new survey of Australian businesses experience through COVID.

It makes clear that although Australia has suffered a 6% decline in GDP and the highest unemployment figures in 30 years, the crisis could have been much worse without the widespread and rapid adoption of digital technology.

Firms in all sectors embraced new technologies to help them navigate the crisis: florists and cafes started selling online; fitness instructors and music teachers offered online lessons; professional and admin workers leveraged online collaboration tools; and, retailers used online technologies to allow touchless service.

According to Dr Andrew Charlton, Founder, AlphaBeta (part of Accenture); “COVID caused Australian businesses to rapidly accelerate technology transformations to the extent that Australian businesses implemented as much change in some technologies over the past year as they had over the past 10 years.

Commenting on the research findings, Steven Worrall, Managing Director, Microsoft Australia said, “Microsoft has been greatly encouraged by the level of economic activity that has been maintained through the pandemic and the role digital technology has played in enabling millions of Australians to continue to do their job and stay productive.

Other findings from the report include:

Technology was key to keeping people in work during the COVID pandemic:

• Nearly 9 in 10 Australian firms adopted new technologies to improve their business continuity during COVID; with 45% of businesses saying technology tools were essential or very important to continued operations.
• That reliance on technology was magnified in a number of sectors including government and public administration (78% very important/essential), education (72% very important/essential), financial services (61% very important/essential), and media and telecommunications (56% very important/essential).

Survival of the digitally prepared

• Digitally advanced firms with higher adoption of front and back office technologies were more resilient during the COVID crisis.
• More digitally advanced firms had more resilient revenues and profitability and were more likely to maintain employment.
• Digitally advanced firms had more resilient revenues and were 16 percentage points more likely to have an increase in revenue and 6 percentage points less likely to experience a fall in revenue.
• They were also 15 percentage points more likely to have an increase in employment and 2 percentage points less likely to experience a fall in employment.
• When it came to profitability, more digitally advanced firms were 12 percentage points more likely to have an increase in profitability and 2 percentage points less likely to experience a fall in profit.

Technology combined with new workplace practices are key to continued productivity improvements

• Many Australian businesses intend to continue to use new digital tools and practices after COVID has passed but need to implement new workplace practices and support systems to maximise their positive impact.
• Videoconferencing is expected to continue to be used more by 45% of firms; filesharing is expected to continue to be used more by 27% of Australian firms. VPN & remote access is expected to continue to be used more by 32% of Australian firms.
• Many Australian business introduced new workplaces practices to ensure digital tools have a positive impact on business and workers. These include flexible working hours (58%), initiatives to increase social connectivity (50%) and initiatives to support physical and mental health (50%).
• Firms that introduced these types of policies had three times stronger productivity outcomes, with 37% of businesses suggesting that their productivity increased.

Acceleration of digital technology adoption

• 54% of organisations said they had increased their use of video conferencing during the pandemic, while 37% increased their use of remote access and 28% increased their use of in filesharing.
• Australian businesses also rapidly accelerated their adoption of front office technologies such as their web presence, ability to take and place orders online and social media activity.

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