Growth was also among 62pc of regional NSW businesses’ opportunity list within the next five years.

The findings come as part of the 2018 Regional Business Insights report by the Commonwealth Bank on July 18.

The report, which described regional businesses as “the heartbeat of regional communities”, provides a snapshot of the opportunities and challenges they are facing.

However, the most challenging factor that regional NSW businesses currently face is competition while finding skilled staff was cited as the top challenge in the future.

Local businessman Bruce Spinks, owner of Wollundry Grove Olives, said that while there were “a lot of complications” affecting the growth of his business, he agreed that finding and keeping skilled staff was difficult.

“With the fluctuations in income driven by the changing climate, it’s hard to have the resources to employ highly skilled staff – even in today’s environment,” Mr Spinks said.

“The seasons have been swinging a lot compared to previous years – it’s something not seen before. For that reason, it’s hard to keep staff,” he said.

Mr Spinks also said factors external to the olive oil–producing industry, particularly politics and government regulations, were hampering growth.

“The political landscape and those in power don’t quite appreciate and understand the climate change issues,” he said.

In Wagga, a number of businesses have closed down this year – including PastaCup, Carv’n It Up, Pizzazz, CC Best, Risky Business, and Jump'n'Putt.

A reason cited was the limited spending by local shoppers. In May 2018, Kooringal Fashions owner Christine Jolley said: “Not enough shoppers, simple as that”.

It is a sentiment shared by Jason Crowley, owner and operator of Crowley’s Hot Sauce.

Mr Crowley cited freight and transport costs and online shopping as challenges with inland regions such as Wagga, which may contribute the decrease in local business activities.

“The problem we see is incurring additional freight costs, which is a burden that’s passed on to customers.

“In Melbourne and Sydney, they don’t really have that,” he said.

“Then you have the online space where some items are vastly cheaper.”

Despite the challenges, Mr Crowley said opportunities for growth in the Riverina do exist.

“One of the good things about regional areas are the events for food and hospitality.

“There’s always going to be demand for food.

“In the hot sauce, brewing and barbecue industries, we do a lot of events in Melbourne and Sydney there, but there’s also plenty of chances to host major events in regional centres to showcase these industries.

“To bring foot traffic from capital cities here,” Mr Crowley said.

He said that smaller markets in regional areas meant more opportunities to experiment and take risks to deliver value to the community.

“It’s not just in creating new products to meet demand and to create niche markets, but to also give people a chance to participate in that process,” he said.

This aligns with the research report finding that 66 per cent of regional business believed they were providing local employment, training and education as a value to their community.

The report also found that regional businesses were more ‘innovation active’ (businesses that have implemented significant changes) than their metropolitan counterparts: 48pc against 46pc in 2017.

“Regional businesses are also employing people who are taking a ‘fail fast, fail often’ approach, with 58 per cent of regional businesses saying that they have employees who are not afraid to take risks,” the report states.

For Mr Spinks, he said that while there were no major innovations currently at Wollundry Grove Olives, gradual and progressive refinements to processes were a part of his operations.

“We’re always looking at making improvements to our technologies,” he said.

Grant Cairns, Commonwealth Bank’s executive general manager for regional and agribusiness banking, said it was encouraging to see regional businesses being more innovative than metropolitan areas.

“Innovation is what ultimately drives business sustainability, so it’s very encouraging to see regional business continue to compare strongly against metro Australia on our innovation measures.

“Regional businesses have adopted a range of behaviours and capabilities that are enabling innovation in their operations, focused largely around staff empowerment,” Mr Cairns said.

As for opportunities for growth, he said that regional businesses cited strong markets, growing populations and improving infrastructure as the underpinning reasons.

“Australia’s growing population, Asian demand for our high-quality food and consumer products and the increase in infrastructure spending are underpinning optimism in regional Australia, and creating a knock-on effect of new openings for a range of industries,” Mr Cairns says.

According to Mr Cairns, clarity around business challenges and opportunities is the first step towards innovation and success.