MANILA – The Covid-19 pandemic has increased the interest of small and medium-sized enterprises (SMEs) in digital technology, but many obstacles are preventing them from adopting the technology needed to overcome the challenges of the pandemic, according to a recent report of the World Economic Forum (WEF).
A new survey conducted by the WEF has found that despite an increased awareness of the importance of digital technology, many SMEs have admitted to putting their digitization plans on hold or having no plans to implement them due to financial strains.
Only 23% of SMEs said the pandemic had accelerated their digitization targets, indicating that significant obstacles continue to hamper the adoption of digital technology, according to the newspaper.
Obstacles include limited availability and access to financial resources, lack of skilled workforce and obstacles related to infrastructure to support digitization.
âIn general, the interest of SMEs in digital solutions is increasing. Agility and flexibility of operations became top priorities before increasing productivity and minimizing costs, which were the primary goal of most companies. Additionally, technologies that enable remote working and collaboration are high on the priority list for digital technology use cases, âthe white paper adds.
The survey of 141 SMEs from six countries (Azerbaijan, Brazil, Colombia, Kazakhstan, South Africa and Turkey) showed increased demand among SMEs to integrate digital technology into business operations, especially with regard to Industrial Internet of Things (IIoT), cloud computing, big data and artificial intelligence.
Most SMEs have expressed interest in deploying technology to optimize processes, ensure safety and security, facilitate quality management, and manage workforce training and collaboration.
âSMEs represent over 90% of all businesses in the world and are the main drivers of social mobility, creating seven out of ten jobs. Unfortunately, these companies are struggling to embrace the Fourth Industrial Revolution (Industry 4.0). Large companies (with more than 500 employees) are six times more likely to use the Industrial Internet of Things than SMEs. This risks exacerbating economic inequalities, stifling opportunities for social mobility and slowing global industrial productivity, âsaid the white paper published this month.
Remote working is the biggest change in the way we do business due to the pandemic.
The WEF said a combination of on-site and remote work is likely to become a permanent feature as the crisis lasts. This increases the urgency for SMEs to adopt digital technology to adapt to the new reality, while attracting talent and remaining competitive.
But most SMEs are still at a low to moderate level of technological maturity, preventing companies from taking full advantage of digital technologies, limiting the ROI potential of digitization and discouraging widespread digitization, the report observes. .
The most common digital transformation challenge cited is that of financial constraints. The uncertainty of the business environment has led SMEs to focus more on short-term goals and plans as well as day-to-day operations and survival.
“The Covid-19 crisis has forced companies to divert funds to other areas such as health and safety and job protection,” the newspaper said.
This problem is exacerbated by the persistent lack of access to finance for SMEs, as banks prefer to extend loans to large companies due to the risk of default.
Another major hurdle is the lack of the skilled workforce needed to support digital transformation.
The majority of respondents mentioned skills gaps in a wide range of areas, such as big data analytics, robotics technicians and IT managers.
In addition, SMEs face fierce competition from large companies to attract workers.
Infrastructure barriers noted include challenges with internet access and speed and the lack of availability of adequate data centers, especially in rural and remote areas.
Respondents also highlighted the lack of availability of digital solutions in the domestic market, exacerbated by the lower level of research and development and innovation compared to advanced economies.
In addition, many SMEs are now focusing on local markets, which present less intense competition compared to the global market. This reduces the incentives for SMEs to fully embrace innovation.
The survey also revealed the dissatisfaction of SMEs with the level of government support. When asked about the most attractive state support instruments to increase digital adoption, respondents said they preferred tax incentives, grants and subsidies, employment support and debt financing .
In addition, the absence of industry standards increases the real and perceived costs of investing in digital technology and discourages SMEs from investing in digital technology.
The report states that there is great potential for SMEs to use digital technology, and policy has an important role to play in promoting this adoption by focusing on providing financial support, l ” improving the skills of the workforce and improving infrastructure.
On the one hand, the government could provide tools and financial support measures to support the training and development of workers.
At the same time, making broadband internet available at a reasonable price and focusing on cybersecurity training and policies will also provide an enabling environment for greater technological adoption by businesses.
âBuilding an effective ecosystem for SMEs has the potential to accelerate their adoption of digital technology. This requires that major stakeholders such as industry, government, NGOs and academia cooperate to improve the technological development of enterprises, âthe report said. (RP)