SMEs Going Digital

Abstract

Despite potential benefits, small and medium-sized enterprises (SMEs) lagbehind larger firms in their adoption of digital technologies. Moreover, digitaladoption by SMEs is to a large extent still confined to basic services, andadoption gaps increase as technologies become more sophisticated. The COVID19 crisis has accelerated SME digitalisation, but barriers to adoption persist. The stakes are high, not only because SMEs make up most of the business and industrial fabric in most countries and regions, but also because they are strategic actors in large firms’ supply chains and play a key role in building inclusive and resilient societies. This Going Digital Toolkit note identifies the challenges that governments face in enabling SMEs to benefit from digital transformation and outlines key policy recommendations, including: 1) encouraging digital uptake by SMEs, 2) supporting SME training and upskilling, 3) strengthening management skills in SMEs, and 4) leveraging financial technology (Fintech) and alternative sources of finance for SMEs.