Unlocking SME growth with data: New research highlights the power of data

15 August 2025

An important national discussion currently being held in Australia is all about boosting productivity. As policymakers and industry leaders convene for next week’s Economic Reform Roundtable,(1) a key challenge is the persistent uncertainty among small businesses, a sector vital to the economy.

Declining confidence among SMEs

The latest NAB Quarterly SME Survey reveals that business confidence is at -8 index points in the last quarter, marking more than two years of negative sentiment.(2) Further supporting this trend, the Small Business Momentum Survey, which tracks NSW small businesses, shows that confidence has recently fallen to levels below those seen in 2020.(3) This weak confidence is a stark indicator of underlying challenges. New research suggests a powerful and novel lever to address this: empowering small businesses with better data. The value of this approach has been quantified in a recent study, offering a timely and actionable solution to help small to medium enterprises (SMEs) navigate the current economic climate and contribute to a more productive and resilient future. The below article briefly explores the research and how it could be applied in Australia.

The role of market information

A recent study by Galdon-Sanchez, Gil, and Uriz-Uharte (2023) sheds light on the significant value of market information for small and medium-sized enterprises (SMEs).(4) The study examined an initiative by a large European bank that provided its SME customers with a free monthly report.

The bank report gave SME businesses access to rich, descriptive data which most SMEs lack the resources to collect themselves. The data was aggregated and anonymised to protect individual privacy. It included data on:

  • The firm's own clientele portfolio: This included granular data on the demographics (age and gender) of their customers, whether they were new or returning customers, and the time and day of transactions.

  • Their competitors: The reports provided the same set of aggregated information for business competitors in the same local postcode and province.

The information allowed businesses to:

  • Target under-served customer groups: By identifying underrepresented gender-age groups in their customer base, businesses were able to tailor marketing and product offerings to attract these new segments. For instance, a Madrid restaurant used this data to redevelop its menu to appeal to a younger, female demographic.

  • Optimise staff rosters and sales timing: By understanding when peak and off-peak times occurred for their competitors, businesses were able to shift sales from busy periods to quieter times, improving operational efficiency. One bar, after discovering it had lower-than-average sales on Thursdays, started a promotional campaign to boost business on that specific day.

  • Identify and exploit new opportunities: The market intelligence allows businesses to identify gaps in the market and adjust their offerings accordingly. A bookstore, for example, learned that many of its clients were from Spanish-speaking countries and responded by introducing classes in English to appeal to a new, foreign customer base.

Using an econometric model, the study examines the causal effect of this information access on firm performance. The researchers found that access to the information service is associated with a causal 9% increase in establishment revenue for adopting firms.

Relevance for Australia’s SME sector

What does this mean for Australia? Given that 97% of Australian businesses have fewer than 20 employees,(5) our economy’s heavy reliance on small businesses is clear, and supporting their ability to thrive is crucial. This research suggests that improving access to market information could be an effective way to boost SME productivity and competitiveness.

Australian banks could also consider offering similar information to their clients. Meanwhile, policymakers could consider initiatives such as expanding the small business benchmarks, provided by the Australian Taxation Office (ATO), by providing more descriptive information about small businesses.(6) Another example of an existing data-driven initiative is the Australian Bureau of Statistics’ (ABS) Business Reporting program. This service is currently offered to businesses who are invited to participate in ABS surveys and allows them to securely link their accounting software to the ABS, making it easier to submit data for official surveys. The program already offers a "compare my business" function, which gives a snapshot of a business's performance against industry averages.(7) We believe there is an opportunity to expand on this model.

Opportunities for policy and industry

In short, policymakers could consider:

  • Expanding the ABS Business Reporting program: Broaden its eligibility beyond the current survey participants so any business can participate and extend it to provide more timely and more granular data.

  • Facilitating data sharing: Encourage secure data sharing between businesses and government agencies to provide SMEs with richer market insights. For example, encouraging Australian banks to offer similar information to their clients or expanding on the ATO’s small business benchmark service and enhancing its user-friendliness.

  • Providing training and resources: Equip SMEs with the skills and tools to effectively analyse and utilise market data.

  • Developing targeted information services: Create platforms or programs that provide SMEs with customised market intelligence relevant to their industry and location.

Access to market information is a powerful tool for driving real, measurable growth in the small business sector. The European study provides an interesting case study for public and private sector collaboration to empower Australia's SMEs with data. As we seek to rebuild business confidence and boost national productivity, investing in programs that promote access to market intelligence represents an innovative and effective pathway. It offers a tangible way to help Australia’s small businesses succeed in an increasingly competitive economic landscape.

Sources:

  1. The Treasury, 2025. Economic Reform Roundtable, Link.

  2. NAB, 2025. NAB Quarterly SME Survey Q2 2025, Link.

  3. NSW Government Small Business Commission, 2025. Small Business Survey, Link.

  4. Jose Enrique Galdon-Sanchez, Ricard Gil, and Guillermo Uriz-Uharte, 2025. The Value of Information in Competitive Markets: Evidence from Small and Medium-Sized Enterprises, Journal of Political Economy, Volume 133 (1).

  5. Australian Small Business and Family Enterprise Ombudsman, 2024. Number of small businesses in Australia, Link.

  6. Australian Taxation Office, 2022. Small business benchmarks, Link.

  7. Australian Bureau of Statistics, About ABS Business Reporting, Link.