Most South African SMEs generate an annual revenue of less than R200 000 and nearly half of SMEs employ less than five employees. This is according to the SME Landscape Report commissioned by Adclick Africa Media Group, which assesses the local SME landscape and identifies key challenges, opportunities and risks, as well as suggesting next steps for SME success. These numbers may seem small but this doesn’t mean that these small businesses aren’t a critical component of the South African economy. In fact, government’s National Development Plan 2030 (NDP 2030) cites SMEs as major sources of employment and drivers of growth in our economy.
As the little fish in a very large pond, SMEs need to leverage new technologies and digital innovations to keep up with their bigger, more established competitors. Not only can these humble businesses enhance their reach and up efficiencies at a lower cost, they can also overcome their scale disadvantage relative to larger players.
And a new report from consultancy firm McKinsey & Company supports this idea; especially if these smaller ventures want to survive and find success post COVID-19. “Because of their critical role in job creation and growth, protecting and enabling SMEs during this period of economic turbulence is important not least because their survival and recovery is likely to be a bellwether for the economy as a whole,” the report states. Often, SMEs are the hardest hit during a crisis. This was seen during the 2008 financial crisis when SMEs experienced the most drastic job losses and revenue declines globally. The McKinsey & Co report suggest that over half of South African SMEs stand to make a 5% loss as a result of the pandemic.
So, how can SMEs solidify their spot as players in the global technology game?
Answering this demands that you first ask a few key questions.
- What key areas of competitiveness are there across your value chain and what technologies can you use to enhance and leverage this competitiveness?
- How can you use technology to be more agile?
- How can you use technology to mitigate market uncertainty
- How can you use technology to minimise disruptions to your operations?
- Is there potential for digital transformation to help you trim costs, automate manual processes and boost productivity/efficiency?
Emerging technologies present opportunities for smaller companies to up their competitiveness, adapt quickly, mitigate disruptions, work smarter and better organise their operations. Need help on your digital transformation journey? Simply complete the form below and we’ll be in touch.