On the 26th of September, EIF hosted a breakfast debate titled ‘Digital Revolution: are SMEs ready?’ chaired by Ivan Stefanec MEP and EIF member.
MEP Ivan Stefanec opened proceedings by stressing the importance of addressing the transformation of the business society, as SMEs are the “backbone of our economy”, creating “85% of new jobs”. The first point raised by MEP Stefanec was the completion of the Digital Single Market, in order to foster not only the free movement of goods and services, but also of information. Moreover, the EU should improve the infrastructure and SMEs’ access to it, while also improving digital skills & literacy. By doing so, the cooperation between start-ups and scale-ups will benefit, as entrepreneurs will have the chance to share experience and best practices.
David Goodridge, Senior VP for Market Development at Mastercard started his speech by saying that “the importance of SMEs cannot be understated” and that Mastercard is looking to act as an enabler with regards to the ‘digital revolution’, as payments are the “backbone of SMEs’ business”. Mr Goodridge then rolled out a few actions that his organization has undertaken in order to help SMEs in the process of digitalisation: focus on the dialogue with SMEs in order to better understand their needs, helping them innovate through mobile POS (points of sale) or simplifying the analytics of their business, in order to drive their business more effectively.
In the opinion of Horst Heitz, Executive Director of SME Europe, SMEs’ success in digitalisation is the key for Europe’s digital future success. He called out the necessity of having a tailored approach, by understanding and considering the many differences between SMEs in terms of culture, region, branches etc. “Everything starts with infrastructure, as without it the SMEs cannot take part in the digital revolution.” In this sense, a balance between rural and urban areas is essential, otherwise Europe will be full of power cells which will make operational costs extremely high, while on the other hand killing SMEs who operate in the countryside. For this transition to happen, SMEs need both the government and the private sector on board. Mr Heitz also underlined the need of improving access to financing and that some issues are better dealt at local level, therefore the European Union should apply the principle of subsidiarity.
After stating that “Europe’s added value to GDP would be 16 billion EUR if we would manage to close the gender gap”, Lenard Koschwitz, Director of European Affairs at Allied for Startups spontaneously proposed to offer his speaking time to a female speaker. Michela Palladino from the Developers Alliance seized the opportunity and reiterated the importance of realizing the Digital Single Market - ‘online platforms’ as a SME driver for digitalisation, a ‘smooth access to market’, digital skills and access to capital. Ms Palladino then raised the point of ‘smart regulation’ and encouraged policymakers to focus on thinking small when shaping regulation.
Dr. Max Lemke, Head of Unit for “Technologies and Systems for Digitising Industry”, DG CONNECT at the European Commission started by pointing out the high level of fragmentation and slow diffusion of digital technologies as factors of risk to the EU’s ability to compete on the global economy. In his opinion, SMEs cannot afford a digital expert to guide them through the transformation process, therefore they need ‘access to competences’. Dr Lemke then added that SMEs need experimentation spaces, to play with technologies but also financing to help them in the digital transformation. The Commission is currently promoting the concept of ‘Digital Innovation Hubs’ – one-stop-shops that support SMEs in their digital transformation. These hubs are heavily promoted especially in Eastern Europe. Moreover, the collaboration across boarders is not sufficiently facilitated and the EU is working towards solving this issue. Dr. Lemke concluded that the EU can support the digitalisation of SMEs by putting in place one Digital Innovation Hub per region - as a co-investment together with the Member States and the European Regional Development Fund - by focusing on the digital transformation of public services and on the technologies which are considered ‘game-changers’ such as: AI, cybersecurity and blockchain.