The digital transformation of micro, small and medium-sized enterprises (MSMEs) is fundamental in the context of the fourth industrial revolution or Industry 4.0. In this article we will discuss how to implement public policies in plans that contribute to the digitalization of MSMEs, taking the Colombian case as a reference.
Among other aspects, Industry 4.0 is changing the way of doing business, and MSMEs are not exempt from this trend. Indeed, they will have to provide services and products to increasingly well-informed customers, in a world that is increasingly managed digitally, which is a challenge, considering, for example, that only 13.2 % of Peruvian MSMEs have digital market platforms or tools to make their product or service sales (INEI, 2021)[1].
Furthermore, according to the OECD (2019)[2], digitalization tends to increase the gaps between highly productive firms, which have access to organizational, technical, and managerial skills, to the detriment of less productive ones. Indeed, the incorporation of transformative technologies, such as artificial intelligence, Big Data, or cybersecurity, implies investments in automation, algorithms and complex skills, which represent a risk of further widening the gap in productivity and average income per worker between firms and firms that are less productive.
In that sense, the potential impact of Industry 4.0 presents significant public policy challenges; and far-reaching implications for living standards and inclusion, in the words of the OECD (2019). As Schwab (2016)[3] postulates, addressing the different issues raised by Industry 4.0 requires flexible and collaborative structures that reflect the integration of different ecosystems and take into consideration all stakeholders, bringing together the private and public sectors.
In this context, the Ministry of Information and Communication Technologies (MINCIT) of Colombia -one of the countries with the highest digital maturity in Latin America, ranked fourth- has been promoting different initiatives to achieve the digital transformation of MSMEs. Thus, the National Digital Strategy of Colombia 2023 – 2026 (hereafter, END) (MINCIT, 2024)[4], is oriented towards productive transformation through the adoption and use of digital technologies and data in the productive sector, including aspects such as the digitization of companies, digital entrepreneurship, and e-commerce, as part of its strategic axis called “Digital economy for productive transformation”.
In line with the aforementioned strategic axis, measures are proposed to promote the digital economy through the creation of digital enterprises to transform the country’s business structure; the attraction of shared financing to strengthen digital enterprises, through the coordination of different actors such as public entities, entrepreneurs, investors, academia, among others; and the strengthening of the productive, administrative and commercial capacities of existing companies through digital transformation, which includes the promotion of a culture of innovation within companies aimed at increasing the use of data and digital technologies.
On the other hand, as part of the strategic axis of “boosting public innovation for a better response to citizens’ needs”, the END looks to boost the participation of MSMEs in innovative public procurement processes, reducing the administrative burden. But the NDT also emphasizes the access, use and exploitation of data, based on the development of a secure, solid, and quality data infrastructure, as one of the enabling elements that can lead to results and impacts in the productive sector (digital economy), including the deployment of backbone and last mile networks for internet.
In Peru, efforts have also been made to promote digital transformation, such as the National Digital Security and Trust Strategy 2021-2026 (hereafter, ENSC) (PCM, 2021)[5] -updated every year in line with technological advances and the situation in Peru and the world- although it is mainly oriented towards public administration entities and citizens, in the opinion of this article.
In this context, Peru could apply in an updated version of the ENSC, more elements aimed at generating transformative impacts or results in a wider range of actors in society, such as the productive sector and specifically MSMEs. The participation of these enterprises in e-government initiatives should be based, among others, on trust in government services and this could also be addressed by the ENSC.
In addition, an updated version of the ENCS could consider the expansion of digital infrastructure to improve access to internet service for large parts of the population, which is a key element for digital transformation, and a factor that could drive new entrepreneurship.
In summary, the digital transformation of MSMEs, in the context of the fourth industrial revolution, is both a challenge and an opportunity. Companies that can adapt and make use of modern technologies, such as artificial intelligence, will be able to improve their efficiency, productivity, and competitiveness. The enabling environment for innovation and digital entrepreneurship in MSMEs can be directly supported by the government, as in the Colombian case.
[1] Instituto Nacional de Estadística e Informática – INEI (2021). Encuesta Nacional de Empresas 2019. Informe Final de actividades y resultados. INEI.
[2] OECD (2019), OECD Economic Outlook, Volume 2019 Issue 1, OECD Publishing, Paris, https://doi.org/10.1787/b2e897b0-en.
[3] Schwab, K. (2016). La cuarta revolución industrial. Debate.
[4] Ministerio de Tecnologías de la Información y las Comunicaciones – MINCIT (2024). Estrategia Nacional Digital de Colombia 2023-2026.
[5] Presidencia del Consejo de Ministros (2021). Documento de Trabajo de la Estrategia Nacional de Seguridad y Confianza Digital 2021-2026.
Excelent!
Thank you!
Very Good, interesting