Small Businesses in Europe Still Not Embracing the Digital Agenda
Wider adoption of digital solutions is needed, but SMEs need to feel confident and assured about online security
The benefits of the digital world – such as e-commerce, e-invoicing and cloud computing – are not being embraced by SMEs across Europe, says ACCA (the Association of Chartered Certified Accountants) today in a new survey report called A digital agenda for European SMEs
The report will be launched at a roundtable event organised by ACCA and UEAPME (the European Association of Craft, Small and medium-sized Enterprises), held in Brussels on the 6 October called “The benefits of the Digital Agenda for SMEs: towards simplification, enhanced cross-border trade and diversified access to finance”.
Hosted by Paul Rübig, MEP, the event will examine the EU’s Digital Agenda for SMEs which was launched in May 2010. Held during EU SME Week 2011, the aim of ACCA’s and UEAPME’s joint event is to discuss this Agenda and make suggestions for the future.
Rosana Mirkovic, senior policy adviser at ACCA and author of the report, said:
“Both the event and the report are timely because policy makers across Europe are waking up to the fact that they have to do more to raise awareness amongst SMEs of the benefits of working digitally.”
“Engaging and reassuring SMEs is critical to the future success of the EU’s Digital Agenda. Banks, policy makers, accountants and the European Commission have a key and joined up role to play here.”
Based on feedback from its members, ACCA’s survey into the EU’s Digital Agenda offers the following recommendations:
More needs to be done by the industry and policy makers to raise awareness amongst SMEs of the potential gains from digital solutions. The survey revealed a lack of awareness of its benefits as a key obstacle to more SMEs adopting digital solutions and services, from cloud computing to e-invoicing to social lending and investment.
Issues of security should not be underestimated by policy makers or industry leaders. The nature of this fear needs to be more thoroughly understood as ACCA’s survey shows security is more likely to be reported by those whose engagement with the digital solutions is high, pointing to potential genuine concerns which should not be dismissed as ‘myths’.
The European Digital Agenda needs to be more consistent across Europe. For instance, e-invoicing is highly developed in Nordic countries while ACCA’s survey showed that there were low levels of demand in Eastern Europe. The European Commission and other policy makers should actively involve the advisory community – such as accountants – and experts on any future policy advice, especially if a critical mass of SMEs is going to be reached.
From the research, ACCA understands that the benefits of cloud computing – the use of online servers for information storage and remote access – are not embraced by SMEs, with the survey showing that half of respondents have very limited or no understanding of cloud computing.
Take-up across Europe of electronic invoicing, or e-invoicing, is also low across Europe, with estimates suggesting that it accounts for only 5% of the volume of all invoices annually exchanged for Business to Business relations, despite the growth in electronic communications. Banks have a clear role to play in the development and growth of e-invoicing.
Social or peer to peer lending
Social lending and investment also needs an awareness campaign from policy makers and experts alike. Social or peer to peer lending has grown since the near-failure of the banking system in 2008. For SMEs however, this is still a niche source of funding, the appeal of which can be greatly increased through more active engagement of SME advisers.
e-commerce, although the most understood dimension of the digital agenda considered by ACCA’s survey, is also under utilised by SMEs. Despite over a decade of strong internet presence, the online retail market in Europe remains small, comprising less than 2% of European total retail trade. Lack of awareness and the issue of cost and complexity are much more likely to be reported by those accountants whose clients do not generally make much use of e-commerce which points towards a need of better understanding of the awareness issues experienced, which are likely to range from lack of awareness of the potential benefits, ease of use to SME relevance.
Rosana Mirkovic concludes:
“To enable targeted policy, current levels of awareness and engagement must be considered in any future initiatives. Factors such as awareness or complexity are likely to be ‘first generation’ or teething problems more common in sectors where the technology is mostly unheard of.”
“On the other hand, lack of demand, risk, cost effectiveness and access to advice are ‘second generation problems’ more commonly reported by those who are more familiar with the technology. Future policy initiatives aimed at engaging the SME sector with the digital agenda will need an approach which truly understands the level of current engagement and the impact of this on the obstacles SMEs are likely to face.”