New research has found small to medium enterprises (SMEs) in Australia and Hong Kong require planning and capital to achieve growth, productivity and innovation.
A lack of strategic planning and limited access to capital to fund innovation are holding back growth and productivity among small to medium enterprises (SMEs) in Australia and Hong Kong, new research suggests.
American Express interviewed 250 CFOs of Australian SMEs to assess how they are futureproofing their business. Only 40 per cent said they had a long-term game plan, defined as a five-year strategic plan. Some 37 per cent had a short-term plan and 23 per cent didn’t have one at all.
Those who had longer-term game plans set more ambitious growth targets, invested more in innovation, were more responsive to new market opportunities, were more upbeat about growth prospects and had been ultimately more successful.
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According to the survey:
- 50 per cent of companies with no game plan predict zero growth.
- 80 per cent of CFOs see innovation as a company priority, but 40 per cent of organisations failed to innovate over the past three years.
- 60 per cent of CFOs find it tough to access capital for growth and say that’s why they don’t innovate as much as they want to.
A second survey of 470 C-level executives at medium enterprises in Hong Kong found that the biggest barriers to agility and growth were a lack of formal innovation strategies (69 per cent of respondents), a lack of leadership (50 per cent) and a short-term mindset (47 per cent).
Companies with turnover of US$10 million to US$20 million typically have a 2.5-year plan, while those with turnover between US$50 million and US$120 million on average have five-year plans.