Digital transformation: the challenge for small businesses

Small businesses are the backbone of global economy, accounting for 90% of businesses, 60-70% of employment and 50% of GDP worldwide. A strong and sustainable global economic recovery is only possible if businesses successfully adapt to consumer behaviour in the post-COVID era. Digital transformation remains the great challenge of our time.

By now, we know for a fact that digital technology has resulted in the recovery of small businesses, for a variety of reasons. First, the adoption of mobile devices makes it easier for employees to experience the benefits of digitalisation. The digital shift is expected to accelerate in the coming years, as the number of mobile users in the world is projected to grow from 6.38 billion in 2021 to 7.52 billion in 2026 – a clear indication of the trend.

Secondly, the way people make their purchases has changed over the years, especially during the pandemic. There will always be a reason for physical stores to exist, but it looks like the future of shopping is increasingly online. Recently, Morgan Stanley predicted that the global e-commerce market will grow from an estimated $3.3 trillion today to $5.4 trillion in 2026, an increase of more than 60% in just three years.

For small businesses, the benefits of digitalisation are clear and measurable. Businesses with a strong digital strategy proved to be better equipped and diversified to cope with the recession of previous years because their online channels mitigated the loss of shopping in physical stores. According to the Organisation for Economic Co-operation and Development (OECD), businesses that invested in their digital future experienced several significant long-term benefits, such as better communications and smoother entry into global markets.

An independent study by American Express Business and Dell Technologies found that small businesses that made digital transformation a priority ultimately had twice as much revenue growth as those that only recently began digital transformation efforts. In addition, prepared businesses saw eight times higher revenues than those that did not prioritise digitalisation.

The good news is that digitalisation is on the rise according to OECD research, which found that up to 70% of small businesses are stepping up their use of digital technologies as a result of the pandemic. This is a clear indication of where things are heading and which way businesses should go.