Further digitalisation of SMEs as booster shot for recovery

Marco Bianchini

Economist and Coordinator of the Digital for SMEs Global Initiative, OECD Centre for Entrepreneurship, SMEs, Regions and Cities

Information and communication technology (ICT) firms have broken new ground to meet the ever-growing demand for digital solutions and large digital-service providers have grown to dominate global markets.

SMEs lag behind larger firms in the uptake of digital technologies, facing barriers such as a lack of access to digital infrastructure, skills, digital security practices and financial resources.¹ The gap is smaller for simpler digital technologies (e.g. social media, e-mail and electronic invoicing) and larger for more complex ones (e.g. enterprise resource planning and cloud computing).²

Accelerated digitalisation due to the pandemic

The pandemic forced many SMEs to digitalise quickly to weather the storm. Across the OECD, surveys showed an increased uptake of digital technologies from 30%-60% of SMEs.³ In many cases this was supported by emergency government support packages, which provided unprecedented support for the digital transition.

Private partners can do more too. Many already offer tailored services, training and learning for SMEs to enhance their digital skill set.

Building on the momentum

But the transition is not yet secure. Although most SMEs (50%-70%, depending on size) intend to continue using the new digital tools they picked up during the crisis, a large share (20%-35%) regard them as temporary.⁴ Governments need to ensure that momentum is not lost,⁵ by leveraging recovery packages to more firmly embed SME digitalisation while dealing with issues such as the impact of teleworking on employees’ and entrepreneurs’ mental health and wellbeing.⁶

Private partners can do more too. Many already offer tailored services, training and learning for SMEs to enhance their digital skill set.⁷ But stronger public-private partnerships will be key, as highlighted by the OECD “Digital for SMEs” Global Initiative, which aims to enhance public-private international policy dialogue and co-operation on SME digitalisation.⁸ Though the pandemic may have forced a shot in the arm for SME digitalisation, major challenges remain. Recovery packages – underpinned by strong partnerships with the private sector – can provide a booster shot to speed up the digital transition of SMEs.