Small businesses across Asean are counting on technology to help them overcome the impact of the Covid-19 pandemic on their operations as they adjust to meet new demand trends.
In a recent survey of 1,000 small businesses conducted by United Overseas Bank (UOB), Accenture and Dun & Bradstreet across the region, technology was ranked the top investment priority for 2020 by two in three (64%) companies, including those who currently have cash flow concerns.
Thailand had the highest proportion (71%) of respondents prioritising technology investments in 2020, followed by Indonesia (65%), Vietnam (63%), Singapore (60%) and Malaysia (59%).
The survey also found that SMEs across Asean are persevering in their efforts to invest in technology even when faced with the prospect of declining revenue. Although some 88% of these businesses have lowered their revenue expectations for this year, 44% of them still plan to increase their overall technology budget.
UOB head of group business banking Lawrence Loh notes that this suggests Asean small businesses are looking beyond the present challenges and are set on adopting technology to improve their competitiveness and sustainability
“The unprecedented economic, business and social impact of the Covid-19 outbreak has underscored the importance of technology for many small businesses across the region. Having had to cope with the disruption to their operations as a result of Covid-19, many of these firms realised quickly that technology can make all the difference to their business.
“Whether in revising their business models or even transforming their operations, small businesses are responding to the changes brought about by the pandemic by turning to technology to ensure their long-term viability and competitiveness, ” he says.
By sector, companies from the F&B, information and communications technology and healthcare sectors (50%) indicated the strongest desire to boost their technology investments, followed by those in construction (48%) and retail trade (46%).
In Malaysia, SMEs are mainly looking at leveraging technology to reduce their cost by improving efficiency.
Among the top priorities in tech investment for local companies are in the areas of building their capabilities in digital sales and services (77%), in digital marketing or social media (68%) and in technology or network management (53%).
Beyond technology, SMEs in Asean are also looking to invest in developing their employees’ skills (51%) and in machinery or equipment (40%).
“As more small businesses prepare to reopen after a very challenging period, their focus on technology will further intensify as they look to reinvent themselves to ensure long-term competitiveness and resiliency. Small businesses that focus on their digital transformation to become more agile and future-proof should see a rapid payback.
“These investments in technology will be essential because small businesses are the bedrock for countries in the region and also our growth engine, so the rebound of SMEs post-Covid will be fundamental for a speedy recovery of Asean economies, ” says Divyesh Vithlani, who leads Accenture’s financial services practice in South-East Asia.
The survey also found that firms in the region are easing their cash flow pressures by seeking deferment on their loan repayments (75%) and renegotiating the terms of their contracts with suppliers and landlords (75%). Small businesses are also looking to increase their working capital through Covid-19-related financing schemes (73%).