(Photo Anatolia)

MANILA The Covid-19 pandemic has boosted SME interest in digital technology, but numerous barriers prevent them from adopting the technology needed to overcome pandemic-related challenges, according to a recent report by World Economic Forum (WEF). .

A new survey conducted by the WEF found that despite growing awareness of the importance of digital technology, many SMEs admitted that they either suspended their digitalization plans or had no plans to implement them at all due to financial stress.

Only 23 percent of SMEs said the pandemic accelerated their digitalization goals, indicating that significant barriers continue to hinder the adoption of digital technology, the newspaper said.

Barriers include limited availability and access to financial resources, lack of a skilled workforce, and infrastructure barriers to support digitalisation.

“In general, the interest of SMEs in digital solutions is growing. Dexterity and flexibility in operations have emerged as top priorities on increasing productivity and minimizing costs, which were once the main objective for most businesses. Moreover, technologies that enable remote work and collaboration topped the list of priorities for digital technology use cases, ”added the whitepaper.

challenges

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 in relation to the industrial Internet of Things (IIoT), cloud computing. , big data and artificial intelligence.

Most SMEs expressed interest in deploying technology to optimize processes, ensure safety and security, facilitate quality management, and manage workforce training and collaboration.

“SMEs represent more than 90 percent of all companies globally and are the main drivers of social mobility, creating seven out of 10 jobs. Unfortunately, these companies are struggling to embrace the Fourth Industrial Revolution (Industry 4.0). Larger businesses (with more than 500 employees) are six times more likely to use the industrial Internet of Things than SMEs. “This risks worsening economic inequality, stifling opportunities for social mobility and delaying global industrial productivity,” the white paper said this month.

Remote work is the most prominent change in the way of doing business due to the pandemic.

The WEF said a combination of on-site work and distance work is likely to become a permanent feature as long as the crisis lasts. This increases the urgency for SMEs to embrace digital technology to adapt to the new reality, attracting talent and remaining competitive.

But most SMEs are still at low to moderate levels of technological maturity, which prevents companies from taking full advantage of digital technologies, limits the potential return on digitalisation investments and discourages widespread digitalisation, the report notes.

The most common challenge to the digital transformation mentioned is financial constraints. Uncertainty in the business environment has led SMEs to focus more on short-term objectives and plans and on operations and day-to-day survival.

“The Covid-19 crisis has forced companies to divert funds to other areas such as health and safety and employment protection,” the paper said.

Worsening of this issue is the continuing lack of access to finance for SMEs, as banks prefer to lend to large enterprises due to the risk of default.

Another important hurdle is the lack of skilled manpower needed to support digital transformation.

Most respondents cited skills gaps in a wide range of areas, such as big data analytics, robotics technicians, and information technology managers.

In addition, SMEs are facing stiff competition from larger companies in hiring workers.

The observed infrastructural barriers include challenges related to internet access and speed and the lack of availability of adequate data centers, especially in rural and remote regions.

Respondents also noted 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.

Moreover, many SMEs are now focusing on local markets, which exhibit less intense competition compared to the global market. This reduces incentives for SMEs to fully embrace innovation.

The survey also found SMEs dissatisfied with the level of government support. When asked about the most attractive instruments of state support to enhance digital adoption, respondents said they preferred tax incentives, grants and subsidies, employment support and debt financing.

Further, the lack of industry standards increases the actual and perceived costs of investing in digital technology and discourages SMEs from investing in digital technology.

settlement

The report said there is a lot of potential for SMEs to use digital technology and politics has an important role to play in promoting this absorption by focusing on providing financial support, improving work skills and improving infrastructure.

First, the government can provide the means and financial support measures to support the training and skills building of workers.

Meanwhile, making high-speed broadband internet available at a reasonable price and focusing on cyber security training and policies will also provide a conducive environment for greater technological adoption among businesses.

“Building an effective ecosystem for SMEs has the potential to accelerate the adoption of digital technology. “This requires key stakeholders such as industry, government, NGOs and academia to work together to improve the technological development of companies.” (PR)