Regulation is hurting international growth of Australian businesses
Going global has a big impact on revenue.
39% of Australian businesses believe it is now harder to operate in multiple countries than it was five years ago, according to a survey by payments network Stripe and global research firm VIGA.
Of those businesses, 49% suggested government tariffs was a major barrier to operating internationally, with 48% agreeing taxes, and 44% identifying regulatory barriers and high business expenses, as other burdens. Almost half of Australian businesses selling overseas suggested the cost of compliance and regulatory issues were increasing, and 46% reported they were also spending more time dealing with these issues.
Australian businesses are behind the curve
Australian businesses trail those in Asia Pacific and Europe in terms of global growth, with only 66% of local businesses selling overseas. By comparison, 88% of businesses in Hong Kong and Singapore have an overseas presence, with 84% of French businesses and 78% of Italian businesses also selling internationally.
Research from the last five years shows businesses that expanded into international markets within the first year grew 141 percentage points more quickly in terms of revenue than those that were slower to go overseas, suggesting regulation and red tape may be significantly hurting the growth of Australian businesses.
Appetite for expansion
Despite this, 71% of Australian businesses deemed "global natives" plan to further grow their international presence, with 38% reporting they would do so dramatically. 58% of surveyed businesses identified new ideas and products as a reason to grow overseas, while 46% agreed going into global markets presented them with better long-term prospects and 37% citing the availability of funding.
Despite the issues surrounding regulation, 25% of Australian businesses said it was easier to operate an international business online today, with two-thirds citing the growth of Internet technology and tools as the biggest factor in going global.
Mac Wang, head of Stripe in Australia and New Zealand, believes modern technology has made it easier than ever for businesses to expand overseas, despite the red tape. "Outdated financial and regulatory barriers are still slowing down innovation and growth for online businesses, but it's no longer an option to make plans to expand internationally in one, two, five years. Luckily, today's technology has made it easy to expand, allowing business to go global from day one. Australian entrepreneurs have the ability to impact economic growth both locally and globally, and we hope to continue being an enabler of international commerce for these businesses here, and around the world," he said.