WEF claims small businesses create seven out of 10 jobs
World Economic Forum (WEF) has revealed that the COVID-19 pandemic increased demand for more adoption and integration of digital technology among small and medium-sized enterprises (SMEs).
WEF, in a survey, noted that SMEs face numerous barriers in adopting technology at a critical time of need.
The survey observed that while 97 per cent of global companies have accelerated the adoption of technology to get through the pandemic, only 23 per cent of SMEs were able to dedicate resources to new digital tools.
Head of urban transformation at WEF, Jeff Merritt, noted that 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.
He added that the COVID-19 pandemic has amplified these challenges, underscoring the need for collective action from the public and private sectors across the globe.
Executive Director of the centre for the fourth industrial revolution, Brazil, Lucas Camara, said: “Having a better understanding of how COVID-19 is impacting SMEs is critical to the world economy.”
WEF pointed out that SMEs represent more than 90 per cent of all companies globally and are the primary drivers of social mobility, creating seven out of 10 jobs.
However, WEF stressed that these companies are struggling to embrace the fourth industrial revolution, endangering their own comparativeness in a global economy.
WEF noted that the pandemic further emphasised the importance of business to be flexible and agile, and yet these digital resiliency tools are out of reach.
Head of the centre for the fourth industrial revolution, Colombia, Erez Zaionce, said: “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.”
According to WEF, 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.
On 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 per cent 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 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.