In the wake of COVID-19, the gap is growing between businesses that can reap the benefit of digital acceleration and those that are struggling to adapt. Micro and small businesses, which represent the vast majority of businesses globally, face a host of challenges when it comes to digitalization.
The barriers go beyond issues of access and connectivity; they include lagging digital skills, a lack of trust and confidence in their own abilities, and the cost of implementing cybersecurity measures, according to a recent ILO report. While digitalization can help micro and small businesses overcome many of the constraints that have hindered their growth, without targeted tools and resources delivered at scale, they are at risk of being left further behind.
Empowering Small Businesses for a Digital Future outlines three ways digitalization creates new opportunities for small businesses around the globe and how to support micro and small businesses in reaching their potential. The insights are drawn from seven years of work in the field with our global partners.
Increased market participation and linkages
Digital platforms can help small businesses reach bigger markets more easily, but small business owners need the know-how to tap into these advantages. Digital platforms like MicroMentor are helping connect entrepreneurs to seasoned experts who can provide tailored advice to help them adapt and grow.
Better access to formal financial services
Access to capital is one of the biggest hurdles small businesses face, often because they lack credit history. Digitizing merchants’ payment histories, like Jaza Duka is doing in Kenya, can help the financial standing of a business. Innovative digital solutions can also help small businesses build financial resilience to boost savings, accept digital payments and access insurance.
More efficient and optimized business operations
From inventory-tracking to supply chain insights, a variety of tools can help small businesses digitize their operations. The CÍVICO Negocios app in Colombia, for example, bundles a suite of services for building a digital presence—which has helped save hundreds of Bogotá small businesses during COVID-19.
To achieve impact, two elements are needed: 1) tools and training that are tailored to unique gender, cultural and business needs and 2) robust collaboration that brings together expertise and resources across the private, public and NGO sectors to drive true change at scale.
Check out more content from the Mastercard Center for Inclusive Growth
KEYWORDS: Global Inclusive Growth Summit, Inclusive Growth, Mastercard Center for Inclusive Growth, Inclusive Recovery, #womenempowerment, #GlobalIGS, #InclusiveGrowth, women's economic empowerment, small business, #SmallBusiness, microentrepreneurs, microentrepreneur, economic growth