The New Zealand economy may grow by at least 5% if all local businesses owned a website, according to a year-long study of the nation's digital economy.

A special MYOB Business Monitor report into New Zealand's e-commerce economy has highlighted that over the last 12 months, businesses with a website earn and sell significantly more compared to those that don't have an online presence.

According to the study, between April 2010 and April 2011, 5 - 9% more businesses with a website have seen revenue growth, compared to those without. Businesses with a website also report significantly increased pipeline work. Since April 2010, between 8 and 17% more businesses have reported increased work or sales in their quarterly pipeline.

However, MYOB general manager Julian Smith says New Zealand's relatively low level of participation in the online economy is holding the country back from enjoying significant economic benefits.

"Currently less than a third of local businesses have their own website," says Julian Smith.

"Although 2% more businesses have gone online in the last 12 months, unless we see a rapid change in the number of businesses establishing a presence online, we are missing a real opportunity to transform the economy."

According to the MYOB Monitor online report, 32% of New Zealand businesses have their own business website, and just 9% sell products or services online. New Zealand's most connected companies are in the manufacturing and wholesale sector (58%) and the retail and hospitality industry (53%) with just 6% of the country's primary sector online.

"Much of the developed world is looking for and buying from businesses online," says Julian Smith. "Even locally, 66% of customers research a business online before making a purchase."

"Unfortunately, despite that massive demand, the majority of local businesses are nowhere to be found in the global online economy."

According to the MYOB special online report, many New Zealand business owners recognise the opportunities the online economy can bring, with 42% identifying the internet as a critical channel for marketing and promotion, and 35% saying they would sell more or get more work if they used the internet better for marketing.

Business owners themselves also increasingly use the internet for a range of business activities. The internet is now the major channel for business banking (76%), buying products and services (38%) and paying bills (32%).

"However, it seems many business owners are still lacking the drive to get online themselves, with 70% of those without a website reporting they don't intend to ever establish a business website," says Julian Smith.

"If this trend continues, not only will New Zealand be unable to enjoy the growth benefits the online economy clearly presents, we are going to lag further behind the rest of the world - including our major trading partner across the Tasman."

According to the MYOB Monitor study over the same period, 39% of businesses in Australia are now online - up 4% since November.

Mr Smith says the Government could be focusing on education to help businesses make the most of the internet, with 37% of businesses supporting the concept of getting further education on competing in the global digital economy.

"But the solution could also be local - supported by regional business groups and local economic development agencies - because greater online engagement could transform smaller regional economies."

"It's certainly an issue that needs to be addressed in the regions. Many of New Zealand's regional economies show a real lack of online participation."

"Ultimately, getting more Kiwi businesses online could be the simplest thing we do as a country to enjoy the growth and opportunities of a 21st Century economy - but it needs a national effort to realise the potential of being one of the world's most connected countries."

How connected is New Zealand, by region Region Business with a website:

Northland 21%

Auckland 42%

Waikato 24%

Bay of Plenty 35%

Gisborne 33%

Hawkes Bay 24%

Taranaki 22%

Manawatu 27%

Wellington 29%

Tasman/West Coast 43%

Otago/Southland 25%

Nelson 40%

Marlborough 24%