Digital transformation key for small businesses in ASEAN
An expected hit on revenue because of the COVID-19 pandemic will not prevent small businesses operating in South-east Asia from continuing their investment in technology.
According to a survey of 1,000 ASEAN small businesses conducted by UOB, Accenture and Dun & Bradsheet, 64% of small businesses identified technology as their top investment priority for 2020.
Across ASEAN, Thailand had the highest proportion (71%) of respondents prioritising technology investments in 2020, followed by Indonesia (65%), Vietnam (63%), Singapore (60%) and Malaysia (59%).
While a vast majority of businesses (89%) expect revenue to drop in 2020, almost half (44%) still plan to increase their overall technology budget. This, said Lawrence Loh, Head of Group Business Banking, UOB, underscores the importance of technology for many small businesses in ASEAN.
He explained, “Having had to cope with the disruption to their operations as a result of COVID-19, many of these firms realised quickly that technology can make all the difference to their business.
“Whether in revising their business models or even transforming their operations, small businesses are responding to the changes brought about by the pandemic by turning to technology to ensure their long-term viability and competitiveness.”
By industry sector, small businesses from the F&B, information and communications technology and healthcare sectors (50%) indicated the strongest desire to boost their technology investments, followed by those in construction (48%) and retail trade (46%).
Beyond technology, companies are looking to invest in developing their employees’ skills (51%) and in machinery or equipment (40%), while 81% ranked the use of digital solutions as their most preferred cash flow management method.
And as more small businesses prepare to reopen, their focus on technology will further intensify as they look to reinvent themselves to ensure long-term competitiveness and resiliency, suggested Divyesh Vithlani, who leads Accenture’s financial services practice in South-east Asia.
He added, “Small businesses that focus on their digital transformation to become more agile and futureproof should see a rapid payback.
“These investments in technology will be essential because small businesses are the bedrock for countries in the region and also our growth engine, so the rebound of SMEs post COVID-19 will be fundamental for a speedy recovery of ASEAN economies.”