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Five major trends set to shape start-ups in 2013

By Oliver Milman
Tuesday, 18 December 2012

feature-2013-thumbAustralian consumers are predicted to spend around $12 billion on gifts this Christmas, hopefully allowing businesses to end what has, for many, been a tricky 2012 on a high note.


A recent Dun & Bradstreet report says that conditions will be patchy again next year for small firms, with rising profit levels and a stuttering jobs market.


But what of the wider trends that will impact Australian start-ups next year and beyond? How is the business world changing and how can new entrepreneurs take advantage?


We had a look at what the soothsayers are predicting to compile the five mega trends set to influence enterprises in 2013.


To view each trend, click on the tabs below:



1. Emerging markets are selling to each other




We all know that Asia, and China in particular, is the world’s emerging economic powerhouse. The IMF predicts that the purchasing power of emerging markets will exceed that of advanced markets for the first time next year – $US44.1 trillion ($A41.7tr) versus $US42.7 trillion.


But this doesn’t just mean that there are increasing numbers of newly wealthy consumers waiting to snap up products and services from countries such as Australia.


A growing trend next year will be businesses in emerging countries selling to each other – Turkey to Brazil, for example, or India to China.


In order to compete with these new rivals, Australian start-ups are going to need to invest, innovate and raise their game.


"We are very exposed to international markets in Australia and there is no way you can fight against that, you have to embrace it," says Dr Stefan Hajkowicz of the CSIRO.


"We have to think about what niches we should target, where can we win and where can't we win; that's the question Australian companies have to target."


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2. Customers backing ideas




The rise of crowdfunding – where people pledge financial support to get a product or service off the ground in return for a future reward – is doing interesting things to the relationship between consumers and businesses.


The amount spent on crowdfunding in the US has quadrupled in just two years to $US2.8 billion and this trend is now catching on in Australia.


Consumers – dubbed ‘presumers’ – are increasingly having input into products and services before they even come to market. With their funding and feedback, they can shape start-ups prior to launch.


This even extends to customers having a stake in businesses and ideas they are interested in, although ASIC will need to change the rules around ownership in order for this to be the case in Australia.


Either way, it’s clear that customers are making their voices heard more than ever before. And they are arguably becoming more demanding.


"Consumers are concerned with intangible qualities of the product they consume, like a cup of coffee being fair trade,” says Hajkowicz. “We have much more expectations from the product."


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3. Shifting tech threats




According to MYOB, 60% of Australian small businesses still don’t have a website, with just 16% using social media to boost awareness and sales.


As these figures move from their low base, entrepreneurs will have to grapple with the morphing tech security threats that continue to blight businesses.


A new Trend Micro report found that while security threats to PCs will actually recede slightly in 2013, a new raft of malicious software will menace small businesses.


High-risk Android apps are set to hit one million – up from 350,000 – next year, while the increasing digitisation of our lives will see bugs emerge in unusual places, such as home appliances and TVs.


Trend Micro says that cybercriminals targeting data stored in the cloud will be a “serious threat” for SMEs, while businesses that fail to upgrade software for tougher security will be most at risk.


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4. Virtual selling




While there are undoubted tech challenges facing new Australian businesses, these are surely dwarfed by the opportunities presented by an increasingly online consumer.


Indeed, technology is shifting the very way people access products and information, forcing start-ups to think laterally when it comes to service delivery.


“Our smartphones are evolving to become wallets, keys, health consultants and more,” says major advertising agency JWT. “Soon they’ll become de facto fingerprints, our identity all in one place.”


“Shopping is shifting from an activity that takes place in physical stores or online to a value exchange that can play out in multiple new and novel ways. Since almost anything can be a retail channel, thanks largely to mobile technology, brands must get increasingly creative in where and how they sell their goods.”


CSIRO’s Hajkowicz predicts online retailing might grow to as much as 15% of overall spending, up from around 5%, in the next few years.


"As we look at the rise of online retail and teleworking, it is a virtual world that we are moving into and it is coming on us quite quickly," says Hajkowicz.


"Younger people who have grown up with the internet from day zero are so used to living online that they don't have a problem with doing the bulk of their shopping online.”


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5. Age-old opportunity




As we are regularly told, Australia is an ageing country. The Australian Bureau of Statistics says that the number of people aged 65 and older (currently around 2.4 million) will grow by 3.5% per year over the next decade to four million in 2022.


This demographic change poses all sorts of questions for businesses, ranging from workforce participation to customer targeting.


But it should be seen as a potential opportunity, according to the CSIRO.


"The big ticket item there is for the business sector to think about how it can treat the ageing population as an asset that can be used in the workforce," says Hajkowicz.


"Businesses need to look at their human resources policy and approaches and look at tapered retirement models where people gradually scale back duties that they perform in the company.”


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