The Digital Transformation of SMEs

image of The Digital Transformation of SMEs

Despite potentially tremendous benefits, small and medium-sized enterprises (SMEs) lag in the digital transformation. Emerging technologies, as diverse as they are, offer a range of applications for them to improve performance and overcome the size-related limitations they face in doing business. However, SMEs must be better prepared, and stakes are high. SMEs make the most of the industrial fabric in many countries and regions, they create jobs (most jobs sometimes) and are the cement of inclusive and sustainable societies. The SME digital gap has increased inequalities among people, places and firms, and there are concerns that the benefits of the digital transformation could accrue to early adopters, further broadening these inequalities. Enabling SME digitalisation has become a top policy priority in OECD countries and beyond. The report looks at recent trends in SME digital uptake, including in the context of the COVID-19 crisis. It focuses on issues related to digital security, online platforms, blockchain ecosystems, and artificial intelligence. The report identifies opportunities, risks of not going digital, and barriers to adoption. It looks to concrete policy action taken worldwide to speed the SME transformation and raises a series of considerations to advance the SME digital policy agenda.



SMEs in the online platform economy

This chapter looks at the ability of online platforms, which connect two or more independent sets of users, and enable positive network effects, increase their customer base, reach scale without mass, find innovation opportunities and assets, and access digital solutions and business intelligence services. However, online platforms can also raise risks related to competition distortions, reputational damage, and digital security or lock-ins, especially for SMEs. The chapter explores relatively scarce international data and literature to analyse SME use of online platforms and economic impact. Finally, the chapter highlights how policy action to support SME’s access to, and ensure a level playing field on, digital platforms is currently being mainstreamed by OECD governments, illustrated through six short case studies (Australia, Denmark, France, Korea, New Zealand, United Kingdom).



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