The impact of COVID-19 containment measures has driven more consumers online and subsequently urged especially micro, small and medium-sized enterprises (MSMEs) to go digital, according to the latest report from the APEC Policy Support Unit and The Asia Foundation.
El report, who are "Supporting the digitalization of SMEs amid COVID-19", recommends that policy makers prioritize the facilitating measures for small businesses to operate online considering that the window between business survival and closure is narrowing amid the pandemic.
“To remain competitive, small businesses need to adapt quickly to new market realities,” said Dr. Denis Hew, Director of APEC’s Policy Support Unit.There is little or no choice for them, except to go digital, especially given that containment measures will likely persist for some time.
The role of small businesses is extremely important in the APEC region. These companies contribute between 40 and 60 percent of the gross domestic product (GDP). in most economies and employ around 60 percent of all workers in the 21 member states. There are nearly 150 million firms considered small businesses in the region.
The report concludes that promoting the adoption of digital tools and solutions will help small businesses tap into new revenue streams, reduce costs and eliminate pain points during the COVID-19 crisis, particularly around managing remote transactions, delivering goods efficiently and engaging with consumers.
Despite the benefits, it is crucial to recognize that digital solutions are not a panacea and have challenges, including cybersecurity and data privacy concerns, exposure to digital fraud, misinformation and digital divide, and infrastructure issues.
“APEC governments are providing relief measures for small businesses, including payment delays, rate cuts, income tax exemptions, wage subsidies, soft loans and refinancing,” explained APEC Policy Support Unit analyst Andre Wirjo, co-author of the policy brief. “Policymakers should proactively adopt a two-pronged approach to enable small businesses to reap the benefits while overcoming the challenges of digitalization.”
The report highlights policy recommendations to accelerate the benefits for small businesses in digitalization, in particular those of the sector of food and drinks, as well as the retail and wholesale sectors.
facilitating measures include the following:
- Focus on Bridging the gap digital and incorporation.
- Promotion of lower costs of data.
- promotion of the literacy digital.
- Support access to mobile money and financial technology.
- Improvement of confidence. in digital solutions.
- Addressing problems of competition.
- promotion of the cooperation regional and public-private partnerships.
Furthermore, as the COVID-19 situation evolves, the report suggests that policymakers consider expanding their support to other sectors, such as tourism and hospitality.
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