Solving the Dilemma of Digital Transformation for Small and Medium Enterprises

2023-11-03

At the recently held 2023 National Conference on Digital Transformation of Small and Medium Enterprises, relevant officials from the Ministry of Industry and Information Technology stated that we need to create a good ecosystem, guide large enterprises to drive the chain digital transformation of upstream and downstream small and medium enterprises, and continue to inject new momentum into the digital transformation of small and medium enterprises. This once again indicates that digital transformation cannot be "fought alone", and it still needs to rely on "big hands and small hands" to work together to solve difficulties. Digitalization of small and medium-sized enterprises is a key and difficult point in the intelligent transformation of the manufacturing industry, and many enterprises have prominent problems of "not wanting to change", "not daring to change", and "not being able to change". Analyzing the reasons behind it, "not wanting to switch" is generally due to insufficient corporate awareness. Some believe that it is not yet necessary to switch, some believe that the transformation investment is huge and may not outweigh the gains and losses, and some are concerned about the insecurity of enterprise assets, trade secrets, and other data after digitization. The main sticking point of 'not daring to switch' is money. Small and medium-sized enterprises generally have weak digital foundations, and mature digital solutions already applied by large enterprises may not be suitable for small and medium-sized enterprises with diverse foundations and demand scenarios. Customization costs are even higher, transformation costs are high, and trial and error capabilities are weak, making many small and medium-sized enterprises hesitant to digitize. 'Not being able to transform' is a lack of ability. The prominent feature of small and medium-sized enterprises is their small size. Compared to large enterprises, many small and medium-sized enterprises with 'no money, no people, no technology' have weak transformation ability. To solve this "three no" problem, we cannot rely on small and medium-sized enterprises to "fight alone". Practice has proven that many small and medium-sized enterprises carry out digital transformation alone, lacking connections with industrial internet platforms and upstream and downstream enterprises. The data systems they spend heavily on cannot circulate in the industrial chain, becoming "information islands" and unable to generate value. For small and medium-sized enterprises with a large volume and a wide range, digitization is the key to enhancing innovation capabilities and the only way to achieve high-quality development. In the era of enterprises competing to use digital technology to reduce costs and improve efficiency for innovation, not turning means elimination, but blind transformation alone may mean "finding elimination". To avoid this situation, government guidance, public platform construction, and the drive of large enterprises are crucial. The government's guidance and support are indispensable in solving the problem of 'unwillingness to transfer'. This time, the Ministry of Industry and Information Technology emphasized the need to do a good job in the pilot work of digital transformation for small and medium-sized enterprises in cities, and create more practical experience models and typical practices that are in line with local conditions. It is precisely to find familiar digital transformation benchmarks for small and medium-sized enterprises around them, because "visible" and "tangible" make it easier to have confidence to replicate. In terms of policy support, it is more important to do a good job in basic security than directly providing discounts and subsidies. This includes consolidating digital infrastructure, improving standards and norms for digital transformation of small and medium-sized enterprises, promoting industrial internet platforms to empower digital transformation of small and medium-sized enterprises, improving network and data security of small and medium-sized enterprises, creating a good basic environment, and driving market-oriented services and public services to drive both, Enhance the willingness of small and medium-sized enterprises to undergo digital transformation. To solve the problem of "not daring to transfer", efforts should be made on replicability, easy promotion, and low cost. From the perspective of the demand side, we can start with enterprises such as specialized, refined, and innovative "Little Giants", which are the leaders of small and medium-sized enterprises. Generally speaking, they have greater development potential, attach greater importance to research and development innovation, and have a stronger driving force for transformation

Edit:Ling Xiaotong    Responsible editor:Li Yi

Source:ECONOMIC DAILY

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