Welcome to the second roundtable of the Digital for Small and Medium-Sized Enterprises Global Initiative. This initiative has grown rapidly since its launch in 2019, benefiting from the stellar leadership of Minister Nash from New Zealand and Minister Troy from Ireland, who are co-chairing today’s discussions.
Many thanks to Business at OECD, and to our funding partners – Amazon, Facebook, Kakao, Microsoft, Wix and Vodafone – for their commitment and support.
I would also like to acknowledge the many entrepreneurs, SME owners and managers who have joined us today. Your participation in these discussions is critical, especially given the ongoing COVID 19 pandemic, which has hit SMEs hard.
OECD analysis shows that SMEs account, on average, for around 75% of all jobs in the sectors most affected by the COVID-19 crisis, compared to 65% in the total business economy.
SMEs are also less likely, in general, to use digital tools to organise their work and sell their products, even though such tools have become crucial for survival in the COVID-19 context. For example, in 2019, 30% of small firms in OECD countries used enterprise resource planning software, compared to 80.3% at large firms. And just 10.7% of small firms implement data analytics, compared with 34.2% in large firms. This is mostly due to a lack of infrastructure and worker skills to use digital tools.
This is why today’s roundtable and the new OECD report, “The Digital Transformation of SMEs”, are so important. Despite some promising success stories, SMEs have been lagging in the race to “go digital”.
In OECD countries, half as many small firms use cloud computing as large firms. Small firms are also half as likely to sell online as large firms. Moreover, when they do sell online, small firms tend to use their own website, rather than e-marketplaces, missing out on opportunities to benefit from network effects and access digital services, such as data analytics.
The current crisis has exposed these digital weaknesses, but it is also leading many SMEs to go digital. According to our report, 70% of SMEs have adopted new digital practices to survive in the COVID-19 context, from smart working solutions to online sales.
Our challenge now is to build on and accelerate this trend, and help all SMEs tackle the many barriers they face on their digital journey. These include a lack of internal resources and awareness, skills and financing constraints, and insufficient infrastructure.
We also need to ensure the digital transition is well-managed; for example, to minimise exposure to digital security threats.
These barriers and risks cannot be tackled by SMEs alone. Policymakers, large and small businesses, professionals, associations, and education and training institutions all play an important role.
Forward-thinking governments have established measures to support firms with the digital transition. Many provide financial support and advisory services, such as Denmark’s SME Digital Programme and the Australian Small Business Advisory Service.
Some provide skills training for SMEs, as in Chile, Israel, Latvia or Spain. Others focus on strengthening data governance and protection in SMEs, including Korea’s Big Data Platform and Network Project.
Policies to upgrade infrastructure have been introduced in Iceland and Costa Rica, with networking programmes rolled out in Belgium and Germany. But it is also essential to build better bridges between the big digital companies, like some of our sponsors, and our SMEs.
We will hear more about these measures during our discussions.
The state of our SMEs reflects the state of our economies. Our SMEs are crucial for a fair and sustainable digital transition, they are essential to promote more inclusive and sustainable growth, they are keys to build back better. We need to increase our support.
Today’s roundtable can tell us how.
I wish you all fruitful and enriching discussions.