In our digital world, regionally based Australian small and medium enterprises (SMEs) face unique challenges. These businesses can struggle with physical distance from customers, suppliers, and business partners. This isolation may limit access to information, skilled staff, and new opportunities for growth. However, with the rise of online social networks (OSNs) like Facebook, LinkedIn, and Twitter, regional SMEs now have tools to overcome some of these barriers by extending their reach and developing new relationships.
C-EDGE researchers Associate Professor Nina Evans with her University of Deakin colleague Dr Rachelle Bosua conducted a study with 13 SMEs across four regional areas in South Australia and Victoria. The study aimed to understand how these businesses use OSNs to share knowledge and build social capital—a critical asset that involves trust, collaboration, and shared values in business relationships.
The research found that the SMEs’ use of OSNs varied across three levels: low, moderate, and high, depending on how actively the businesses used digital channels to engage with customers and partners.
- Low use: Some SMEs used OSNs simply to share basic information about their products or services. For example, companies like HotelA and ElecMechEng relied mainly on websites, resulting in minimal interaction and limited development of social capital. Their approach was more about showcasing products than engaging in meaningful dialogue.
- Moderate use: Other SMEs, such as ConcreteMix and DentalServ, took it further by using platforms like Facebook and YouTube to share updates, tips, and news. This helped them inform and build stronger relationships with customers, contributing to better trust and a sense of community.
- High use: SMEs like GrowATree, AutoEng, and HerbFresh actively used multiple OSNs to foster communication, learn from customers, and collaborate with partners. For instance, GrowATree combined platforms like Facebook, Twitter, and YouTube to interact with both local and international customers, share gardening tips, and even co-develop new products based on feedback.
The study revealed three ways OSNs helped SMEs build networks, relationships, and trust among individuals and groups:
- Structural capital: OSNs provide a platform for SMEs to establish new connections with customers, suppliers, and partners. This broader network allowed them to access more ideas, resources, and expertise, particularly valuable for innovation and product development.
- Relational capital: Through regular interaction, SMEs strengthened trust and relationships. For instance, AutoEng used LinkedIn to maintain professional ties with partners, while HerbFresh used Facebook to engage with customers and respond to their feedback, building stronger community ties.
- Cognitive capital: OSNs facilitated shared values and understanding among users. For example, FarmHarvest used YouTube to demonstrate its grape-harvesting equipment, allowing customers to understand the technology better and align with the company’s mission.
The study proposed four strategies for effectively adopting OSNs:
- Develop a digital strategy: SMEs should integrate OSN use into a broader digital strategy to enhance communication and knowledge sharing.
- Use multiple channels: Adopting various OSN tools helps reach different audiences and creates richer interactions. For instance, combining blogs, Twitter, and Instagram can support different communication needs.
- Gradually replace face-to-face networking: While face-to-face interactions remain important, SMEs can extend their network reach by supplementing or replacing these interactions with digital channels.
- Protect competitive knowledge: SMEs must be cautious about what information they share online to avoid leaking sensitive business insights.
Regional SMEs can significantly benefit from embracing digital networks. By leveraging OSNs, these businesses can overcome geographic barriers, improve collaboration, and enhance their competitive edge. Success will depend on them having a clear digital strategy, diversifying their communication channels, and carefully managing information sharing to protect any IP.
With considered implementation, OSNs can be a important tool in today’s digital economy for regional SMEs to innovate, grow, and thrive.
To contact Associate Professor Nina Evans, please email > nina.evans@unisa.edu.au
