Media releasePublished on 16 November 2021

Behavioural research by Xero uncovers barriers to small business technology adoption

Australian small businesses are delaying investing in technology due to “wait and see” attitude to benefits

Melbourne – 16 November 2021 – Simple changes in habits and process could prove more effective than costly educational campaigns in helping small businesses take advantage of digital technologyʼs benefits, according to a world-first behavioural science study conducted by Xero, the global small business platform.

The One step study surveyed more than 4,200 small business owners in six countries (Australia, New Zealand, the UK, the United States, Canada, and Singapore). Carried out in partnership with behavioural science consultancy, Decision Design, the report found that small businesses which readily adopt new technology enjoy on average 120 percent higher revenue. They also reported 106 percent higher productivity than those which repeatedly fail to do so and were 27 percent more likely to wake up excited about their work.

Yet despite technology adoptionʼs substantial and well-documented benefits, and even aer the pandemic drove firms to deploy digital solutions en masse, only one in five small businesses consider themselves as technology adopters – compared to nearly one in three who admit they continually delay investing in new technology.

The research revealed that this ʻadoption gapʼ stems from several behavioural barriers – mindsets and perceptions about technology and change – that frequently recurred amongst small businesses all over the world. Small business leaders tended to believe that their current solutions were good enough even if new technology might help them do better; to focus on risks and short-term losses when considering change; and to freeze up when forced to compare, understand, and choose between numerous technology options.

“Our research suggests that for small businesses, the greatest hurdles to harnessing technologyʼs benefits arenʼt a lack of information or choice, but deeper anxiety and concern about how complex and costly the change process might be,” said Rachael Powell, Chief Customer Officer, Xero. “Small businesses may know the benefits, but theyʼre not adopting technology because the idea of doing so feels deeply uncomfortable and even threatening.”

The study also found that only 19 percent of Australian small businesses consider themselves keen adopters of new technology, with only four in 10 respondents being open to taking risks in their business decisions. Small businesses in Australia also tended to:

  • Put off technology-related decisions if confronted by too many options (6 in 10) or because such decisions didnʼt feel urgent (7 in 10);
  • Feel reluctant about changing things that theyʼd been doing since day one (more than 6 in 10); and
  • Lack confidence in getting the support they needed for beneficial new technology from their business leaders (7 in 10)

“Australian small businesses appear to get uncomfortable when thinking too much about technology adoption and the change it may bring to their business,” said Joseph Lyons, Managing Director, Xero, Australia and Asia. “Focusing on small step-changes to technology and on the personal upside it can introduce – like getting time back to spend with family – could help reduce

this discomfort and even turn it into enthusiasm.” Based on its results, One step offers several recommendations for how policymakers, advisors, and technology vendors can help small businesses by presenting technology adoption in a more straightforward, less daunting way. These include:

  • Encouraging smaller incremental changes to technology, rather than high-cost, high-risk investments;
  • Celebrating small businesses whoʼve benefited from technology adoption as examples that normalise digital change;
  • Quantifying the true gap between current operations and those enhanced by technology;while also
  • Measuring technologyʼs benefits in a way thatʼs more relatable to small businessesʼ experiences; and
  • Narrowing and simplifying technology choices to minimise decision paralysis.

The report also includes simple handles that small businesses can grasp to help overcome their behavioural barriers including decision matrices, ʻpre-mortemʼ evaluations, cost-benefit analyses, and setting aside time for peer learnings. Each activity helps to clarify the true risks and rewards of technology adoption, allowing small business leaders to overcome confusion and uncertainty to make more rational decisions about the different options they may face.


Media Contact

Xero Australia | Jessica Brophy | +61 431 268 549 |

About Xero

Xero is a cloud-based accounting soware platform for small businesses with over 3 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 1,000 third-party apps and 300 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScape as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.


Xero partnered with behavioural science firm Decision Design to complete an anonymous and unbranded, nationally representative market study among n=4,211 small businesses across Australia (n=1,212), New Zealand (n=170), the United Kingdom (n=1,162), the United States (n=1,165), Canada (n=341) and Singapore (n=161). This behavioural science-led study measured perceptions, beliefs, behaviours and behavioural barriers related to technology and technology adoption. Data collection by Decision Design was conducted between 12 – 26 July 2021 and study respondents are all small business decision makers for businesses with less than 50 employees (less than 100 employees in the United States).

For all media enquiries, please contact the Xero media team.

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