Peter pan

The role of gigabit connectivity in accelerating SME digitalization and resilience –

The impact of COVID-19 has been global and indiscriminate. The current situation forces us to think, plan and operate differently. While it affects us all, the direct impact on businesses and individuals differs – notably the disproportionate impact on small and medium-sized businesses and those who depend on them.

Irina Varlan is the Managing Director of GigaEurope.

Characterized as the “heartbeat” of the European economy, SMEs account for more than half of Europe’s GDP and employ more than 100 million people, according to the Commission’s 2020 statement, “A Strategy for SMEs for a sustainable and digital Europe”. In addition to boosting local, regional and national economies, these companies provide services to EU citizens living in rural and isolated communities.

SMEs are heterogeneous and span a variety of industries and sectors, such as hospitality, tourism, fintech, telecommunications, construction and defense. Yet most face the commonality of being disproportionately impacted by the pandemic and encounter greater obstacles to sustaining their businesses.

The pandemic has accelerated digitalization, enabling SMEs to leverage online platforms for business intelligence services, improve productivity and reduce operating costs. Pervasive applications, such as cloud solutions, e-commerce capabilities and online banking, are now vital. A 2021 OECD study, “SME Digitalisation to Build Back Better”, shows an increase in revenue for SMEs that have engaged in digital sales or advertising.

Connectivity and the willingness to integrate new digital solutions will allow businesses to survive and thrive in the future. A recently published report by Vodafone Business, in partnership with the London School of Economics – ‘Fit for the Future’ highlights the importance for business owners to embrace change and actively plan for the technological future of their businesses . He also describes how being “future-ready” has helped businesses of all sizes.

For businesses to harness the full potential of digital tools, such as click and collect, online delivery, virtual events and video conferencing, they must have access to fast and reliable broadband connectivity as a prerequisite. Successful digital transformations of SMEs, in particular, also require better digital literacy and a supportive policy environment. An EU study revealed that more than 33% of SMEs report encountering administrative and legal obstacles to making their business more efficient in the use of resources. The study also reports that only 17% of SMEs have successfully implemented digital technology.

The European Union has set itself ambitious objectives within the framework of the Digital Decade initiative. We welcome these goals and call for a multisectoral and multifaceted approach to the SME ecosystem. No one can overcome these challenges alone. Programs such as “Horizon Europe” promote innovation and access to relevant technologies. The EU must also combine these financial resources with policies that reduce the regulatory burden on SMEs and proliferate digital literacy, thereby improving market access for SMEs. A conducive policy environment builds on existing policy frameworks and mitigates overly burdensome compliance requirements, which disadvantage SMEs.

In addition, European Parliament recommendations to harmonize regulations across the EU-27, amend legislation that is ill-equipped to respond to changing technologies and further clarify the definition of an SME could have a lasting impact on business health and resilience.

In addition to political support, all players in the digital ecosystem must collaborate and create a positive environment facilitating the digital transformation of SMEs. During the next series of digital debates, GIGAEurope will explore how the gigabit connectivity industry can play an important role as part of a multi-stakeholder approach to help SMEs manage their digital transformation.