Digital transformation of micro and small enterprises
As many as 42 percent of micro and small enterprises encountered some legal barriers that prevent them from applying digital technologies, and 61 percent believe that the informal economy can be reduced by digitizing operations . These are the results of the analysis carried out by the Business Confederation of Macedonia on the degree, obstacles and needs of micro, small and medium-sized enterprises from primary digitization in operations.
The full analysis “Enabling Environment for Inclusive Digital Transformation of MSMEs in North Macedonia” is available here.
“Digital transformation has become a necessity in today’s business processes. It encompasses the use of digital technologies to improve business processes, improve customer experience and drive innovation. However, many micro and small enterprises face various barriers in the adoption and effective implementation of digital solutions and the analysis shows just that. It identifies and locates the challenges faced by micro and small enterprises, as well as the key factors that hinder their inclusive digital transformation. Based on that, it also offers valuable insights on how to overcome those challenges and how micro, small and medium enterprises can apply these technologies. In cooperation with the competent institutions, in this way we will jointly create the policies to facilitate and help the digital transformation”, said Mile Boshkov, president of the Business Confederation of Macedonia.
The results of the analysis showed that barriers to the digital transformation of micro, small and medium enterprises include limited resources, lack of digital skills and digitally skilled workforce, inadequate infrastructure and regulatory constraints together with inertia of managerial capabilities, which significantly limit the capacity and ability of MSMEs to use digital technologies to maximum effect. The existing conservative corporate culture among companies in North Macedonia prevails and also contributes to the low level of digital transformation.
Accessibility to e-commerce platforms , as a desired tool for business promotion, was cited by many of the micro and small enterprises that work with sales as an obstacle in terms of security related to online data transactions , as indicated by 60 percent of respondents. An additional 40 percent of respondents identified limited access to data and analytics, indicating that businesses are aware of the benefits of using data to make informed decisions.
The report uses both qualitative and quantitative data analysis for a comprehensive assessment of various aspects of the digital transformation environment in 114 micro, small and medium enterprises. The purpose of conducting this research is to help the digital transformation of MSMEs.
The International Labor Organization provided support to the Business Confederation of Macedonia in assessing the environment in which Macedonian enterprises operate in order to understand whether the current business environment encourages or hinders the digitalization of business operations. The research looks at the external business environment trying to see if current laws and policies, access to finance, access to business development services, access to markets and e-commerce platforms, as well as a digitally skilled workforce support companies’ digital transformation , but at the same time we analyzed at the company level, trying to understand if there is enough potential, if there is enough digital readiness for companies to accept digital technologies, said Julia Drumea , an expert on employers from the International Labor Organization .
We are here today to support small and medium-sized enterprises, in terms of creating policies based on which there will be opportunities for the state together with the private sector to improve and help the digital transformation. That process is complex and requires a great deal of commitment both in terms of the human factor and in terms of infrastructure, and training. We are here as an institution together with the private sector to help the digital transformation to be fast and efficient. The link for connection between institutions and companies is necessary and therefore we are very open as an institution together with the private sector to create policies related to digital transformation based on the needs and shortcomings that have already been mapped in this report, the Minister of Information Society and Administration pointed out. , Dr. Azir Aliu.
This report is published with the support of the International Labor Organization (ILO) .