SMEs, what support for the digital transition

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The digital transition is now at the heart of SME development strategies, whether in terms of online sales or process dematerialization. As citizens and consumers gradually make their mark with digital tools, SMEs and TPEs may have difficulty implementing their own digital revolution.

Following the publication of Pascal Gruny’s information report in the Senate on behalf of the Business Delegation on 4 July, fourteen remarks were made concerning the support of the digital transition for businesses. The observation is clear: France must be able to catch up to become a platform economy. In order for SMEs to flourish in the digital age, the existence of an operational business ecosystem with strong institutions is now more than necessary.

The challenge of economic and social dynamism

The digital revolution acts as a transforming factor in the nature of the firm. Many international bodies have understood this. This is particularly the case for the Secretary-General of the United Nations, Guterres, who has established a panel on digital cooperation in 2018. The digital transition also has many effects on a country’s production apparatus. At the forefront of this transformation of their strategic universe are SMEs and TPEs. SMEs account for more than 90% of businesses and more than 70% of employment in most countries. Their ability to embrace technological change is therefore vital to sustainable and inclusive growth in order to foster competitive markets.

In addition, new technologies and digital platforms have the potential to change the way companies access personalized market information. In practical terms, new digital technologies instantly connect buyers and sellers globally in a wide range of sectors. This is leading to changes in the business practices of SMEs.

However, France is only ranked 15th in the European Commission’s 2019 ranking based on the DESI index, relating to the economy of digital companies. France is therefore lagging behind its European neighbours despite the national desire to embody a “Start-up Nation”. Business leaders and managers of SMEs and TPEs face a set of obstacles that need to be overcome: whether in terms of lack of culture and digital skills or the lack of financial support.

Regional recommendations to help SMEs face digital challenges

In order to improve the business environment, many players help SMEs adopt new technologies and manage risks. In parallel with the central state, regions and local authorities through the Chambers of Commerce, stimulate and finance actions related to the digital initiative, whether for economic development or for the improvement of the economic lung of a territory. Such players are involved in promoting trade and investment, providing digital skills and training. They also have a role to play in monitoring quality standards. Managing the digital transition means fostering the confidence of SMEs and driving calculated risks.

In management science, the concept of a “business ecosystem” refers to an economic community. The International Trade Centre puts forward this term. Applied to SMEs, the business ecosystem reflects an important balance of power. In fact, the smaller companies tend to have less control over their business environment. On the other hand, large corporations are often in a position to shape their business ecosystem, either directly or by expressing their concerns to those in positions of influence. The ecosystem considers therefore greatly influences how technological changes affect the future competitiveness of SMEs in the digital age. From a regional point of view, the New Aquitaine business ecosystem is favourable to SMEs as they generate many investments. For example, to accelerate the digital transformation of SME-SMEs, a partnership initiative was set up in 2018 with the regions and some 50 economic partners in the national territory. France Num thus functions as an accompaniment network thanks to a platform of personalized resources. Another recommendation proposed by the Senate Delegation is that of a digital checkbook that would be valid throughout the territory, thus uniting the criteria for allocating regional aid to the digital transition. The former Aquitaine Region had already launched digital transformation cheques to help small and medium-sized enterprises (SMEs) obtain financial contributions from Europe. This scheme has been extended throughout the New Aquitaine Region and even amplified with a regional financing mechanism to enable as many companies as possible to pass the milestone and successfully transition to digital.

The report issued by the Senate delegation to businesses on the digital transition of SMEs and TPEs aims to support three central aspects of this transformation: information, finance and logistics. The International Trade Centre calls on SMEs to take on the role of “cautious revolutionaries” who are ready to face the challenges of digital technology, but in a thoughtful and common way.

Justine ANGIBAUD

Sources:

Official website of FranceNum

Information report of the Senate Delegation to Business, Pascale Gruny, July 219

Summary “Business Ecosystems in the Digital Age,” International Trade Centre, 2018

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