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September 14, 2020updated 15 Sep 2020 11:09am

Digital technology implementation crucial for small business survival

By GlobalData Technology

Small businesses are relying heavily on digital technologies to help them through, and out of, the current pandemic, according to a survey published in September.

Conducted in June 2020 during the heart of the Covid-19 pandemic, Cisco’s 2020 Small Business Digital Maturity Study sized up the readiness of small businesses in eight countries (the UK, Germany, France, the US, Canada, Mexico, Brazil, and Chile) to adopt key digital technologies, as well as the challenges they face in doing so.

While the concept of ‘digital technologies’ can sometimes be evasive, Cisco includes a variety of cloud, customer experience, collaboration, and cybersecurity software and hardware solutions.  Increasingly these solutions are infused with artificial intelligence and analytics in order to make companies more competitive and to reduce reliance on or enhance the value of human employees.

The headline survey finding: 70% of small businesses surveyed indicated they are accelerating their digitalization rates to address Covid-19 challenges; these respondents believe that the most digitally advanced small businesses are best equipped to handle variable market conditions and grow their revenue.

Many small businesses in the survey plan to invest more aggressively in remote work capabilities, expanding online sales and developing a more comprehensive digital strategy.

The Cisco study estimates that by 2024, small businesses could add $2.3 trillion to countries’ gross domestic product (GDP) by embracing a host of internal and customer-facing digital strategies. Cisco also indicates that economies in those eight countries could increase by 5.5% and grow at a 42% faster rate through increased small business digitalization.

Even though they have made some progress, small businesses across the board still have a long way to go.

According to Cisco’s four-stage analysis, developed with assistance by IDC, even the most advanced countries are only in the second phase (“Digital Observer”).  That means most companies still have a long journey ahead of them to become truly ‘digital native’ companies.

Cisco called out particular challenges for companies in Latin America. In contrast to small businesses in the UK, the US, and Germany that have made the most progress on digitalization, small businesses in Mexico, Brazil, and Chile lag behind.