Study reveals SMEs’ priority
Credit to Author: ANNA LEAH E. GONZALES| Date: Tue, 20 Aug 2019 16:22:57 +0000
Small and medium enterprises (SMEs) in the Philippines and five other countries in Southeast Asia are looking at investing more in current technologies within the next three years as the key enabler to drive new business propositions and deliver on enhanced offering,a study released by SGV & Co. and Ernst & Young (EY) showed.
The “Redesigning for the digital economy” report, which involves 370 mid-market SMEs with annual global revenues of between $20 million and $500 million in the Philippines, Indonesia, Malaysia, Singapore, Thailand, and Vietnam, revealed that current technologies are the investment priority for this year.
Of the 370 SMEs, 18 percent are from Vietnam, 15 percent are from Thailand, 16 percent are from the Philippines, 17 percent are from Indonesia, 16 percent are from Malaysia, and 18 percent are from Singapore.
The study found that SMEs in the Philippines currently focus their investments on current technologies (85.0 percent), fixed assets (83.3 percent), and transformative technologies (71.6 percent).
Looking at the SMEs across the six countries, the study found that 77.2 percent focus on investing in current technologies, 76.4 percent in transformative technologies, and 74.0 percent in fixed assets.
Transformative technologies cover digital applications such as artificial intelligence (AI), machine learning, blockchain and robotic process automation (RPA), while current technologies are defined as upgrades and expansions to existing infocomm technology (ICT) software, hardware and services.
The study further revealed that in three years’ time (2022), SMEs in the Philippines will still focus on investing in current technologies (86.0
percent), followed by transfomative technologies (83.3 percent) and fixed assets (80.0 percent).
EY Asean Markets Leader’s managing partner Liew Nam Soon said there are two reasons why SMEs in the Philippines intend to invest more compared to the rest of the Southeast Asian countries.
“The incremental growth is a lot higher in the Philippines. We think one reason is because of the catch up game. It’s also because people think this is an opportunity to move forward in the competition and therefore the investments are much bigger,” said Soon.
Across the six countries, the study found that by 2022, respondents expect their investment priority to shift to transformative technologies (80.7 percent). Those that expect current technologies and fixed assets to be investment priorities in 2022 slipped to 76.9 percent and 72.0 percent respectively.
“Companies are investing in conventional technologies as to drive business-as-usual performance. However, going forward, the sea change is that they see the value and potential that emerging technologies such as artificial intelligence and machine learning bring,” said Soon.
“Further, digitalization is not a one-off investment or project. Digital adoption is a journey that will require long-term organizational change, executive sponsorship and a different lens on investment horizons,” Soon added.