SMEs, what support for the digital transition

In 2020, the COVID-19 crisis pushed SMEs to take part in the digital transition. Indeed, following lockdowns, the closure of non-essential businesses and the implementation of a curfew at 6 p.m., companies have had to adapt. Indeed, the measures put in place by the government do not allow, or no longer, companies to practice their activities in the same way as before. Today, they are seizing the opportunities that digital technology can bring.

In order to keep their heads above water and let the waves pass over the economy, SMEs are taking a step forward in the digital transition. However, they may feel a little helpless in the face of this project, which is the digital transformation. They may also lack resources. For this, a solidarity movement has emerged. Google and Amazon offer workshops to understand how to make the transition. On the other hand, the government is updating its financial aid to support companies in this direction. The goal for companies is to find customers via the internet, retain them… Or save time thanks to digital communication and the implementation of software.

The digital transition is now at the heart of SME development strategies. It intervenes both in terms of online sales or about the dematerialization of processes. While citizens and consumers are gradually taking their marks with digital tools. SMEs and VSEs may have difficulty implementing their own digital revolution.

On July 4, Ms. Pascal Gruny’s information report was published in the Senate on behalf of the Delegation to Companies. Fourteen remarks were made. They concern the support of the digital transition for companies. The observation is without appeal. France must be able to catch up to become a platform economy. SMEs must invest in the digital transition. 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 of the Secretary-General of the United Nations, António Guterres. In particular, in 2018 it established a panel on digital cooperation. 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. Indeed, SMEs account for more than 90% of companies. They account for more than 70% of employment in most countries. Their ability to take ownership of technological change is therefore vital. Indeed, the prospect of sustainable and inclusive growth must foster competitive markets.

In addition, new technologies and digital platforms have other advantages. They 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 leads 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 VSEs are indeed facing a set of obstacles, for the latter it is time to meet the challenge of the digital transition. Whether in terms of lack of digital culture and skills or insufficient financial support.

SME digital transition enterprise

Regional recommendations to help SMEs face digital challenges

With the aim of a better business environment, many actors are helping SMEs. It helps them adopt new technologies and manage risks. In parallel with the central State, the regions and local authorities, through the Chambers of Commerce, promote and finance actions related to the digital initiative. The objective is the economic development or for the improvement of the economic lung of a territory. Such actors are involved in promoting trade and investment. They provide digital skills and training. They also have a role to play in monitoring quality standards. Managing the digital transition means fostering the trust of SMEs and setting up 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. Indeed, the most modest companies generally have less control over their business environment. On the other hand, large companies are in a position of strength. They can shape their business ecosystem, either directly or by voiciming their concerns to those in positions of influence. The ecosystem therefore has a significant impact on how technological change affects 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 transition of SMEs, a partnership initiative was set up in 2018. The regions and about fifty economic partners of the national territory participate in this action. France Num thus functions as a support 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 transition cheques to help VSEs and 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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