SMEs or “Small to Medium Enterprises” contribute a lot to the economy around the world. Still, they face many challenges, especially in the wake of the COVID-19 pandemic. This is because the pandemic has changed people’s behavior, including how they use products and services around the world.
Many SMEs have acted quickly and, because of their focus and work, they have built the resilience and better processes needed to survive these times and adapt to the new normal.
Trends Among SMEs and Adapting to the New Normal
There has been a noticeable intent to go digital among SMEs through an increased focus on remote work support, online platforms, and upgrading existing IT solutions over the past few years. All these trends are reflections of the new normal.
- Remote Work Support
Remote work, which was initially a necessity for the world because of the lockdowns, has become an attractive way to cut costs even further and improve flexibility in the workspace. However, improving productivity in virtual meetings or environments has been a challenge.
- Online and Omnichannel Platforms
Several SMEs are now considering the option of opening up online offerings for their customers. This will boost their competitiveness in the market as the world moves towards the new normal. Many SMEs will have customer experience as a top priority through these digital offerings, which will help give them an edge. A space for physical interaction combined with a strong online infrastructure will be key to building trust, speed, efficiency, and quality.
- Digital Transformation
The world’s business are moving towards a digital-first and cloud-based model. A transformation will have to follow that utilises the cloud, artificial intelligence, and automation to make businesses agile and flexible. This new tech will increase affordability and boost the appeal of digital investments.
Contribution of SMEs in GCC Countries
Every GCC country has launched programs to support its SMEs. These SMEs are also rapidly growing and have the potential to be globally competitive and the power to build a sustainable, diversified economy for the GCC.
SMEs represent 95 to 99% of any country’s enterprises. The average SME contribution to the GDP in the European Union is 55%. Bahrain’s GDP share of SMEs is 28% – and yet SMEs are responsible for 73% of all private-sector jobs, according to a study by National Commercial Bank (NCB). In Saudi Arabia, the SME GDP contribution jumped to 45% in 5 years, since Vision 2030 was launched. In Dubai alone, SMEs make up nearly 95% of all companies, employing 42% of the workforce and contributing around 40% to Dubai’s GDP.
GCC countries have recognised the value of SMEs in sustaining real growth over a long time and providing employment to many people. A lot of these SMEs still operate in traditional areas such as trading and contracting.
Although few SMEs have grown into large-scale enterprises, SMEs can expand into many more innovative areas such as knowledge industries and manufacturing. If SMEs want to survive long term, they have to build a sustainable long-term advantage. This will also help them compete globally and keep innovating and commercialising.
The future of SMEs looks promising as they continue to adapt to the new normal through digitisation. With governmental support for SME growth, innovative SMEs could become large enterprises and improve the GCC region’s competitiveness on a global level.