iscoverAustralia’s small businesses must learn to operate more efficiently with technology as the nation looks for new ways to lift productivity and long-term growth, according to COSBOA.
SME tech adoption key to driving economic activity, COSBOA says
29 August 2025
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9 minute read
The Council of Small Business Organisations Australia (COSBOA) has revealed that Australian businesses must learn to be ahead of the digital and technology curve to contribute to stronger economic performance.
In its 2025 State of Small Business Report in partnership with Square, COSBOA said technology adoption was linked to stronger small business productivity, sales and economic contribution.
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It was noted that small businesses made up 97 per cent of all Australian enterprises, employed more than five million people and contributed over $589 billion to the national economy, emphasising the importance of keeping their operations up-to-date and efficient.
According to COSBOA, the report relied on survey data from more than 500 small business owners and Square Australia’s transaction insights.
The results demonstrated that tech-enabled sellers were consistently outperforming those who had not been proactive in incorporating digital aspects into their day-to-day operations.
Square said data showed that sellers using its software tools processed 94 per cent more in sales volume than Square sellers who don’t, and businesses with API integrations processed 2.6 times more volume in sales and nearly double the number of transactions.
Matthew Addison, COSBOA chair, said the shift to digital was not just a recommendation, it was a necessity.
“Technology is no longer optional. If you are still relying on pen and paper to run your business, you are at serious risk of being left behind. That State of Small Business Report and Productivity Commission both make it clear that digital adoption is critical for lifting Australia’s productivity,” he said.
“Small businesses that embrace modern tools are more efficient, more competitive and more resilient. This is not just a business decision. It is an economic imperative.”
Both Square and COSBOA said the report followed the Productivity Commission’s interim reports, which highlighted that digital adoption, better data access, AI and small business technology enablement could significantly boost national productivity.
Results reflected that 85 per cent of small businesses were already leveraging at least one digital tool, yet investment was still deemed “cautious” and the majority of businesses planning to upgrade their tech expected to spend less than $5,000 over the next year.
Marco Lamantia, Square Australia executive director, said the message from the report was clear: “Technology adoption is now one of the biggest levers available to drive small business productivity, from cutting admin to accelerating sales and streamlining customer engagement. Digital tools are giving time back to business owners and helping them do more with less.”
“The report reinforces what we hear from sellers every day. Productivity gains come from small, consistent improvements, not big overhauls,” he said.
“It’s about tools that reduce friction, remove repetitive tasks, and give time back to focus on what really matters. That’s what we’re building – technology that fits around how small businesses work, giving them time back to grow and focus on their craft.”
Addison added that as Australia continued to face complex economic conditions, the productivity of small business would be central to national recovery and resilience.
“Small businesses are laying the groundwork for national productivity gains by adopting digital tools, upskilling their teams, and streamlining operations – actively contributing to a more productive, future-ready economy,” he said.
“But to fully unlock this potential, targeted policy interventions, accessible funding and hands-on support are needed. Surveyed businesses called for practical assistance to digitise in the form of training, IT support and access to grants and affordable tools. With these enablers in place, small businesses will be well placed to weather future volatility and lead Australia’s next chapter of inclusive and digitally-driven economic growth.”
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