Three Gaps in the Digital Transformation of Micro, Small and Medium-sized Enterprises (MSMEs): Competence, Financing and Governance

Sparked by the Covid-19 pandemic, social distancing and lockdown measures have changed the daily activities of many individuals. Even though digitalization has helped ease the transition, several studies focused on MSMEs have found that while some are successful in digitalizing operations, others see a fall in investment.

Through the Private Sector Digital Monitor study, INGEV examined MSMEs’ level of digitalization and their needs. The study surveyed a large sample of enterprises, including those that are both locally and foreign-owned.

The purpose of the study was to reveal the extent to which private sector companies are able to access the benefits of digitalization, especially during the pandemic. The study also reported findings regarding potential gaps and areas for improvement in this field.

There were three fundamental recommendations to overcoming obstacles to digitalization:

  1. Competence Gap: There was a lack of awareness concerning various technologies, or not knowing how to access them;
  2. Financing Gap: Insufficient funding to use such technologies; and
  3. Governance Gap: There was a lack of long-term and in-depth strategy development. Many had digitalization strategies that only responded to customers’ short-term needs – such as marketing and the follow-up of orders or complaints – or used it as a marketing strategy so as to not fall behind competitors.

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