Thought
leaders who study small and mid-sized enterprises (SMEs) have issued a blunt
warning about the dangers of remaining analog laggards in an increasingly
digital world.
A
leading economist, a UN agency executive, and a specialist in entrepreneurship
with the OECD all agree that smaller firms must digitalize now or risk
extinction within a short time. Their remarks appear in the latest edition of
Huawei's Transform magazine.
"Technology is developing
so fast," warned Zou Ciyong, Deputy Director-General of the UN Industrial
Development Organization. "If you can't catch up with the trends, the gap
will widen further."
Zou adds governments must help
SMEs, and focus on what he calls "the 70-80-90 issue." "SMEs
generate 70% of the tax base that provides government revenue, 80% of the
technological innovation, and 90% of all employment. Even so, many countries
don't do much to support SMEs' digitalization."
Sandrine Kergroach, who
studies SME and entrepreneurship performance for the OECD, says smaller firms
often lack the skills, awareness, or internal capacity to identify the best
solutions for their business. "SMEs lag broadly in adoption of digital
technologies," she notes.
COVID pushed companies to
digitalize, including smaller ones: up to 70% of all SMEs increased their use
of digital tools in 2020. But despite this uptick, SMEs remain cautious.
"The change has remained
limited to certain forms of digitalization, suggesting a forced adaptation
rather than a strategic transformation," observed Kergroach.
"Digitalization is
crucial for the financial sustainability – the survival – of any business, big
or small", said Professor Phoebe Koundouri, President of the European
Association of Environmental and Resource Economists. "SMEs will benefit
from the optimum combination of the right policies, technologies, and financial
tools. Governments need to invest the necessary resources and get people
engaged."
By: Kanto Okanta
