By Lee Kah Whye
Singapore, July 27 (ANI): A study published by HP Inc. (formerly Hewlett-Packard) last week revealed that a majority of small and medium businesses (SMB) expect to not just to survive but thrive in the challenging business environment brought on by the COVID-19 pandemic.
The survey which involved over 1,600 Asia-Pacific SMBs was conducted between May 26 and June 7 this year. In addition, 200 interviews were conducted in India, Australia, Indonesia, Japan, South Korea, Singapore, Thailand, and Vietnam. Only an owner, partner, managing director, CEO, COO, CFO or a director of a business with less than 200 employees qualified for the survey. Interviews were split evenly between micro businesses (less than 10 employees), small businesses (10-49 employees) and medium businesses (between 50-199 employees). Multiple industries including wholesale and retail, manufacturing, professional services, healthcare, education, and financial services were represented.
The study, titled "From Survival to Revival", found that following COVID-19, many of the business owners and senior managers believe that digital transformation will be a key part of their revival. Some 60 per cent of respondents see digital transformation as vital with innovation in work processes, flexible work options and customised products and services identified as key future strategies.
Indian SMBs lead the region in recognising the importance of digital transformation with 65 per cent of them stating that it is essential or very important in helping their businesses recover from the pandemic. Across all sectors, 60 per cent cite this factor as essential or very important. 65 per cent of Thailand SMBs also acknowledge this.
In the survey, companies that place high importance in digital adoption are also most confident of bouncing back. Leading the way are Indonesian SMBs with 74 per cent being most confident of their company being innovative and believing that digital adoption is essential or very important as is with Thailand SMBs at 65 per cent. Businesses in India, Vietnam and Australia also rank highly in terms of companies that are most confident of their ability to be innovative.
While noting that the fact that around one in four businesses believe innovating their products and services and using digital tools can help them turn the corner, Indian and Singaporean SMBs are particularly inclined to innovate this way. Many SMBs in India see the better use of online tools as crucial to accelerating their recovery. In Singapore, companies say that innovating products and services is their most important rebound strategy.
While many SMBs realise the value of innovation, execution appears to be an issue. In markets like Australia, Singapore, South Korea, and Vietnam, knowing how to innovate ranks as one of the top three barriers to SMBs quick recovery.
The survey also discovered that although SMBs value innovation and technology solutions, they are unclear where to look and what solutions available. Not surprisingly, these solutions need to be cost effective due to the financial toil the pandemic has placed on their businesses. Only 2 in 10 work with external specialists or consultants to foster innovation and only 4 in 10 SMBs have a department or person responsible for innovation.
As expected, the survey uncovered that most companies anticipate their business growth to be significantly hampered by the pandemic. 80 per cent of businesses in the survey expect the pandemic to have a moderate to high impact on their financial performance this year. Across the region, pre-pandemic, 46 per cent of SMBs were expecting growth but that figure has plunged dramatically to just 16 per cent.
India and Vietnam SMBs are the most confident about post pandemic growth whereas Singapore, Japan and South Korea are least positive.
At least 45 per cent cite global instability post-pandemic as a barrier to success, resulting in uncertainty and the ability to plan for the future. The other top barriers to success are cash flow, adequate marketing, and recruitment.
Productivity suffered because of social distancing measures and lockdowns implemented across many countries in the region due to COVID-19. Only 6 per cent of SMBs recorded higher levels of workplace productivity compared to the pre-COVID period while 43 per cent recorded lower productivity.
The study also highlighted that a digital-first mindset and digital skills were issues that needed to be addressed among the SMBs surveyed and this affected growth. This digital deficiency amplified by the pandemic was experienced by nearly half or 44 per cent of respondents.
Accentuating this, is a need to identify digital talents who can help SMBs to transform their businesses. The majority of SMBs do not dedicate resources or invest in innovation as a discipline. It is more common to ask customers what they want, or simply mirror what the competition is offering. Only one in five SMBs have customised offerings, looked for new sales and supply-chain channels or introduced new lines of business. In this respect, Indonesia (59 per cent) and Thailand (51 per cent) stand out for having the highest percentage of SMBs dedicating resources to innovation. Unsurprisingly, SMBs in Indonesia and Thailand are also most confident about business performance post COVID.
Furthermore, during this period of uncertainty and challenges, SMBs who need help are unclear about where to look for advice to leverage digital and technology in order for them to effectively "punch above their weight" when competing for business in the future. Among the help required, financial institutions rank highest (31 per cent). Only 19 per cent of respondents turn to IT companies for help. This even though good IT companies offer the knowledge, technical support, and services to help businesses drive innovation through digitalisation.
"SMBs are the lifeblood of every economy in Asia but the pandemic has hit SMBs hard. As the engines of growth for Asia economies, it is critical for them to move past survival to revive their businesses," said Ng Tian Chong, Managing Director, Greater Asia at HP.
"This study provides us with the insights to provide practical help for SMBs so that they have access to an ecosystem of devices, tools and technology. With these resources, we want to help SMBs unlock innovation for customer and employee-centric experiences, as well as broadly upskill talent to rebound from the pandemic and prepare for the future," Chong added. (ANI)