Vodafone: Enterprises and governments must support SMEs

By Murielle Lorilloux, Director of EU Cluster, Vodafone Business
Murielle Lorilloux, Director of EU Cluster, Vodafone Business says that enterprises and governments need to do more to support SMEs to drive growth

The success of every economy relies upon the success of its SMEs. They are the beating heart of economic growth and success. There are 24 million small businesses across Europe alone, employing a total of 95 million people and generating €4 trillion a year, and they’re integral to innovation and job creation, creating 85% of all new jobs each year. Individually they may be small, but collectively they are mighty. 

SMEs have been some of the hardest hit by the pandemic – and they need support now to help with their digital transformation. Governments alone cannot support SMEs through this challenging time, and at an individual level everyone can play a part. But at a corporate-level, larger enterprises now need to help SMEs on their digital transformation journeys. It is undeniable that digital tools and solutions have played a critical role in driving greater business stability and resilience, and these tools can also play an important role post-pandemic for SMEs.

The digital transformation challenge

Even before the pandemic, the attention SMEs needed to invest in ensuring their digital setup was optimal was a challenge. Lacking time and resource, it was easy for SME leaders to get pulled away from crucial business planning and into the day-to-day operations. 

Digital transformation isn’t a single line item or point on an agenda or to-do list. It’s a series of initiatives and projects, and these initiatives and projects are often delayed or deprioritised due to more pressing day-to-day issues taking priority. In times of crisis, this cycle is intensified.

But we know digital skills and solutions have been a lifeline in a world transformed by COVID-19. It’s been estimated that ten years’ worth of transformation happened in the space of ten weeks. And some businesses were better placed than others to weather this storm. 

Our recent Fit for the Future research found that small businesses are lagging behind their larger counterparts when it comes to digital transformation, and many didn’t even have a plan in place pre-pandemic. The report found that 69% of large enterprises say they have accelerated digital transformation plans following the pandemic, compared to just 47% of smaller businesses.

This has led to many small businesses struggling, with larger companies also reporting that they are far better equipped than their smaller counterparts to embrace change, respond to trends, deal with risks, and digitise processes.

The role of larger organisations

This lack of digital transformation is also hampering the recovery of many small businesses and our research shows that 21% of small businesses expect to see lower profits than last year versus just 13% of larger organisations. This is simply not sustainable.

Too many SMEs have found significant barriers when it comes to the adoption of digital services, meaning they are still much less likely than larger businesses to take advantage of new technologies.

Larger enterprises can support and mentor SMEs through these challenges, by doing more to make services and solutions accessible. By partnering with the right technology provider that truly understands their challenges and can help them find the right technology, and deliver training to address skills gaps, SMEs will be in a far better place to thrive in our increasingly digital world. 

It is important to understand that the term SME encompasses a wide variety of businesses, from young start-ups to more mature organisations. The size and maturity of each SME will undoubtedly impact their approach to digital transformation, so it is vital that large corporations provide the necessary flexibility with a wide portfolio of solutions that tailor to every small business.

At Vodafone Business, we’re passionate about doing our part and have created V-Hub, a platform designed to help SME business leaders across Europe develop their digital skills. With a range of resources on topics such as website construction, security, remote working and digital marketing, there is also additional support via a chat service which puts businesses directly in touch with the experts to discuss specific issues and get more tailored information. 

Governments must play a part

While there is a lot that technology firms can do to make their products and services more accessible and increase adoption, not every small business understands the importance of greater digitalisation.

This is where governments must step in and develop effective policy frameworks to promote SME digitalisation. Recovery packages introduced across the globe, such as the EU’s recovery and resilience fund, provide a timely opportunity to do so. This would be best achieved by adopting a framework that:

  • Is designed in collaboration with SMEs and technology providers, to ensure the scope of the policy framework meets the needs of SMEs
  • Delivers additional measures to support capabilities such as curated online resources and training, to encourage take-up
  • Offers grants or vouchers for digital investment, so that SMEs have the capacity to find solutions based on their individual needs
  • Addresses availability gaps by supporting investment in areas where infrastructure is not available or offers free or subsidised high-speed connectivity to those sectors in greatest need.

We have already seen some positive examples of these principles in practise within both Spain and Italy. Greece is set to launch their voucher programme in early June, and SMEs are welcome to apply for the vouchers from mid-June, with Portugal and Ireland launching in the future. 

Spain has focused on the development of the SME Digital Toolkit, which was co-created with industry and SMEs, and will financially support the digitisation of each of these businesses through a voucher scheme. Vodafone is delighted to be involved in this programme and is partnering with local companies BeeDigital and Billin to support digital services such as webpage building and digital invoicing for SMEs. 

However, in order for SMEs to be able to deploy these and other advanced digital tools to their full potential, they must be supported by high-quality connectivity. Italy has recognised this in their recent announcement of a connectivity voucher scheme for SMEs. The scheme enables SMEs to upgrade to connectivity of at least 30Mbps download speeds and will cover the cost of the tariff from 18 to 36 months. These are great examples of initiatives that can be replicated in other countries.

At Vodafone Business, we will also be playing a leading role in helping SMEs to access cash from the EU recovery resilience fund and the next phase of our V-Hub content will be focused on providing this guidance.

We need to ensure all European SMEs thrive in a future that is down to increasing their digitalisation. If we don’t the impact is just too severe.

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