Digital transformation Strategy for Small and Medium-Sized Enterprises

Young Sam Cho ()
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Young Sam Cho: Korea Institute for Industrial Economics and Trade

No 22/1, Research Papers from Korea Institute for Industrial Economics and Trade

Abstract: The majority of SMEs are not ready for successful digital transformation. Among the few SMEs that have sought to embrace digital transformation, their focus is overwhelmingly on maximizing the efficiency of organizational management and working processes. SMEs attempting digital transformation, in other words, are largely focused on gaining short-term benefits. A lack of financing, difficulties in building custom systems tailored to individual enterprises, and the burden of maintenance and upgrades are the major obstacles standing in the way of SMEs’ digital transformation. We must thus discern variations of digital transformation for SMEs in relation to their needs. Decision-makers at the levels of businesses and government alike ought to consider the differences between various types of digital transformations. Policy support is especially needed to enable SMEs to make the necessary strategic investments in digital transformation by minimizing uncertainties over expected benefits. Policy support is also necessary to strengthen SMEs’ own convictions in the benefits of digital transformation. There is a strong correlation between the expected benefits of digital transformation and motivation for investment. The more benefits companies expect from digital transformation, the more likely they are to invest in it. If digital transformation is an important policy concern to the government and occupies a major place in the government’s strategy for advancing and upgrading the industrial ecosystem, policymakers ought to make greater efforts to provide a vision of digital transformation to companies and enhance SMEs’ policy acceptance.

Keywords: SMEs; SMEs’ Policy; SMEs’ Digital Transformation (search for similar items in EconPapers)
JEL-codes: L25 L53 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2022-01-28
New Economics Papers: this item is included in nep-cse and nep-sbm
Note: KIET Monthly Industrial Economics Vol.280
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Citations: View citations in EconPapers (1)

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