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OECD Secretary-General

Launch of “Digital for SMEs” Initiative

 

Remarks by Angel Gurría

OECD Secretary-General

Paris, France - 29 November 2019

(As prepared for delivery)

 

 

 

Dear Ministers, Ambassadors, Ladies and Gentlemen:


I am delighted to launch the inaugural roundtable of the Digital for Small and Medium sized Enterprises (SMEs) Initiative. We are joined by a good friend of the OECD, Mr. Stuart Nash, New Zealand’s Minister of Small Business, who has travelled from the other side of the world to chair today’s discussion. Minister Nash, thank you for your strong personal engagement on this important global initiative.


I would also like to welcome Minister Park from Korea and Minister Breen from Ireland, who will co-chair today’s meeting with Minister Nash. Last but not least, I would like to thank all participants, particularly the entrepreneurs and SME owners. Your presence and voice are essential as we strive to create better policies for our SMEs.

 

The digital transformation is well underway

There is no doubt about it: economies, governments and societies across the globe are going digital! In March 2019, we delivered the final report of our horizontal “Going Digital” project, which has now entered its second phase. Our work has shown that digitalisation offers tremendous opportunities to increase productivity, create jobs, reduce our environmental footprint and address social challenges, such as ageing.


This is exciting and hugely encouraging! But it also comes with challenges, including new risks and uncertainty around job automation. We must continuously strive to correct fault-lines and address fears. And we must ensure that everyone benefits from the digital revolution – all people, all firms and all places.

 

Digitalisation offers diverse benefits for SMEs…

SMEs and entrepreneurs are as much at the heart of these disruptive and fast evolving global trends as some of the more obvious, bigger names that may come to mind. They should be considered powerful players. Indeed, their intrinsic agility can help countries adapt quickly to these major structural shifts that are changing the rules of the game.


The digital economy offers new opportunities for scaling up and reducing costs, including through the creation of new business models that can challenge existing ones. And SMEs are the first to stand to benefit! This applies in particular to new or younger firms that often start digital, but also to more traditional, established firms looking to go global and reach new markets through online activities.


…but SMEs’ digital potential remains under-exploited.

However, digitalisation has not benefited all businesses to the same degree, and most SMEs are lagging behind large firms in the digital transition. Technology adoption remains an issue, especially for small and micro firms. In 2018, across the OECD, SMEs were only half as likely as large firms to be using e-commerce or cloud computing. This gap was 3 to 1 in Mexico and Spain, almost 4 to 1 in France and almost 5 to 1 in Poland.


In addition, SMEs often lack information and awareness of new digital possibilities. They lack the skills needed to identify the right technology options for their business and manage organisational change, or they lack financing solutions to effectively implement change.


This matters because SMEs are the backbone of our economies – they represent over 90% of all enterprises and provide two-thirds of all jobs! SMEs are also the industrial fabric of many regions and cities – they are key to social cohesion and an engine of regional job creation and well-being.

 

But there are some worrying trends in this regard.

Our new SME and Entrepreneurship Outlook shows that new jobs are mainly being created in low-productivity and low-wage sectors. For example, between 2010 and 2016, close to 90% of all new jobs by new firms in France were created in activities with below average wages, while this figure stood at two-thirds in Germany and the United Kingdom, and over three-quarters in the United States.


If more than 90% of our businesses are SMEs, this is a problem! It means we need more productivity champions!


So how can we get there? I say bet on technology upgrading! In other words, bet on digitalisation as a key avenue for SMEs to improve their productivity and allow them to pay higher wages. All these issues are at the heart of the international dialogue we are launching today.


There is a clear role for policy to address digital gaps among firms by supporting skills development, organisational change or process innovation. The menu of policy options is wide, ranging from broader innovation support packages to dedicated technology extension programmes, including financial, technical and training assistance. Governments must also walk the talk; for example, by introducing e-government solutions that can facilitate consultations and service delivery to SMEs; as well as by promoting open government data initiatives that give SMEs access to new data at reduced costs and support them in building their portfolio of intellectual property assets.

 

The Digital for SMEs Initiative and inaugural roundtable 

The Digital for SMEs Initiative is a joint endeavour by the OECD and Business at OECD (BIAC). It responds to a call made by Ministers and high-level representatives from over 50 countries, international organisations and associations at the 2018 OECD Ministerial Meeting on SMEs in Mexico. The aim is to foster international co operation and dialogue in this area, including by giving a stronger voice to SMEs. And this is the very reason we are here today!


As a global multi-stakeholder platform, the Digital for SMEs Initiative aims to engage all actors worldwide to enhance SME use of digital technologies. This includes governments and regulators; private sector representatives and business associations; financial institutions and research organisations; and trade unions and civil society. And, naturally, the entrepreneurs themselves.


This inaugural Roundtable will help us gain a better understanding of the drivers and barriers to the digital transformation of SMEs, and the role governments and other stakeholders can play in unleashing SMEs’ digital potential.


Ladies and Gentlemen:


Digital technologies are the new energy of our economies and SMEs are the cells. They are synergetic! The Digital for SMEs Initiative will boost this synergy, with your help.


Let’s seize the opportunity of this Roundtable to reflect on the challenges ahead. The OECD stands ready to offer its support through evidence based analysis and to facilitate international co-operation and mutual learning to design, develop and deliver better policies for SMEs.


I wish you all fruitful and enriching discussions. Thank you!

 

 

See also:

OECD work on SMEs and Entrepreneurship

 

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