A survey by the World Economic Forum (WEF) indicates that the COVID-19 pandemic has increased demand for more adoption and integration of digital technology among small and medium sized enterprises (SMEs).
However, WEF notes that the SMEs face numerous barriers to adopting technology at a critical time of need.
According to the survey, while 97% of global companies have accelerated adoption of technology to get through the pandemic the forum’s survey indicates that only 23% of SMEs were able to dedicate resources to new digital tools.
It notes that SMEs are still scrambling to meet mandated health and safety measures, threatening their ability to stay operational.
“Three years ago, the government of Brazil sounded an alarm on the urgent need to help support the modernisation and competitiveness of small and medium-sized enterprises,” says Jeff Merritt, head of urban transformation at WEF.
“The COVID-19 pandemic has amplified these challenges, underscoring the need for collective action from the public and private sector across the globe.”
“Having a better understanding on how COVID-19 is impacting SMEs is critical to the world economy,” says Lucas Camara, executive director of the centre for the fourth industrial revolution, Brazil.
WEF points out that SMEs represent more than 90% of all companies globally and are the primary drivers of social mobility, creating seven out of 10 jobs.
Unfortunately, it says, these companies are struggling to embrace the fourth industrial revolution, endangering their own comparativeness in a global economy.
The pandemic further emphasised the importance of business to be flexible and agile, and yet these digital resiliency tools are out of reach, WEF notes.
“The pandemic made it clear for many SMEs that to remain relevant, they must adapt quickly to our new reality and adopt technology that will allow them to stay in business,” says Erez Zaionce, head of the centre for the fourth industrial revolution, Colombia.
The survey of 141 SMEs from six countries that are part of the World Economic Forum’s fourth industrial revolution network – Azerbaijan, Brazil, Colombia, Kazakhstan, South Africa and Turkey – shows heightened demand among SMEs to integrate digital technology in business operations, particularly related to the industrial internet of things, cloud computing, big data and artificial intelligence, says WEF.
When asked about the different use cases most SMEs expressed interest in deploying technology to optimise processes, ensure safety and security, facilitate quality management, and manage workforce training and collaboration.
Given the low level of automation and digitalisation among SMEs, the report suggests an outsized opportunity for SMEs and digital solution providers to collaborate.
Despite the increase in interest in digital technology, only 23% of SMEs surveyed have said that the changes brought upon by the pandemic have led to the acceleration of their digitalisation goals.
While some of this investment was shelved due to the economic impact of the pandemic, the survey points towards the continued existence of barriers for a wider adoption of technology among SMEs. This includes limited availability and access to financial resources, lack of a skilled workforce and infrastructure to support digitalisation.
WEF believes that policy-makers have an important role to play in reducing barriers, aligning incentives for different stakeholders and creating an environment conducive to wider adoption and deeper integration of digital technology among SMEs.
It points out that this will not only save jobs but also create new ones by raising awareness, supporting upskilling, providing financial assistance and building a collaborative environment to encourage wider adoption of technology.
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