How to foster digital transformation to support SMEs

By Dr. Jim Poisant, Secretary General, WITSA
Small and medium sized enterprises (SMEs) play a critical role in creating jobs and promoting economic growth, especially in developing countries – as the vast majority of businesses in low-income countries and more than half of all formal jobs worldwide stem from SMEs. The economic impact of SMEs to the information and communication technology (ICT) and mobile sectors are particularly important, and they play an increasingly critical role in addressing development challenges, such as sustainability and service delivery.

Fostering an environment that promotes digital entrepreneurship and is conducive to SMEs is critically important in keeping with the vision of the World Information Technology and Services Alliance (WITSA): Fulfilling the Promise of the Digital Age for everyone.

In recent years, we have seen incredible technological advances through the Internet, mobile broadband and devices, artificial intelligence, robotics, advanced materials, improvements in energy efficiency and personalized medicine. Digital transformation is underway but not fully understood. Without action and collaboration, digital transformation will not by itself, lead to broadly shared prosperity and growth.

Digital transformation and the growth of utility-based cloud computing has shifted focus from technical barriers to the business environment obstacles that digital entrepreneurs must address on a regular basis. This shift puts new emphasis on the importance of government’s role in implementing sound and effective policies that enable the best climate for digital service incubation, innovation, growth and successful development.

Government’s role in digital transformation

In order to achieve these goals, WITSA developed the Digital Transformation Enabling Policy Principles paper to support governments and to foster sound national policies. Here are some of our key recommendations:

Industry and governments must work together to ensure that the digital transformation will be a powerful force for the common good, valuing humans as assets in the jobs market, fostering innovation, matching job skills with the needs of the new economy, bridging the digital gap in underserved populations, and promoting trust and security as well as driving businesses to create products that consumers rave about.
Governments must redouble efforts to remove barriers and encourage a market-driven approach to policy focused on innovation, market competition, free flow of information across borders, mobility of skilled workers, research and development and investment in transformative technologies. The growth of SMEs and digital entrepreneurship can only be achieved when sound policies are in place which support new and transformative businesses as well as international competitiveness.

Work in the future will be driven by new generations of workers, rapid and unpredictable technological changes.

To support the growth of SMEs, future jobs and required skill-sets, governments must fully embrace innovation as essential for business and society as a whole, reducing costs, resulting in greater prosperity, growth and competitiveness. It is also essential for governments and businesses to get together to figure out how to use innovations and technology to increase the value of humans in the workplace and to ensure access to skilled workers through cross-border access as well as collaboration with the private sector to ensure a domestic skills supply.
Governments should promote a competitive environment by reducing barriers to entry of products, services and talent; avoid policy interventions that discourage innovators and new competitive business models, avoid over-regulating data collection, storage and usage while still fostering trust in transformative technologies, promote open standards and open data, encourage digital entrepreneurship by simplifying and harmonizing regulation, and promote access to capital for start-ups and fostering an environment that allows entrepreneurs to take the risks necessary to innovate.

WITSA therefore strongly urges governments to redouble their efforts to foster national policies supporting new and transformative businesses as well as international competitiveness.

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