How can SMEs become data-driven enterprises?

Data is the key to unlocking valuable insights, staying ahead of emerging trends and gaining a competitive advantage in the current uncertain, volatile and dynamic global business landscape.

In comparison to other companies, small and medium-sized enterprises (SMEs) face specific challenges on their path to becoming data ready. Limited technical and financial resources, data-centric expertise and an intricate labyrinth of data regulations hinder their ability to make effective data-driven decisions.

Recognizing and addressing data readiness needs is not just important, but a strategic imperative that can drive efficiency, unlock growth potential and propel SMEs’ productivity. So how can SMEs become data-driven enterprises?

Every SME is unique and recognizing and addressing its specific data needs is an indispensable strategic move to succeed in leveraging data effectively, to drive its operational efficiency and unlock untapped growth potential.

To comprehend the SMEs’ data readiness journey, a recently published report from the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR) provides crucial insights.

The study surveyed 111 SMEs, spanning 42 countries and 21 industries and identified challenges and opportunities, which will play a critical role in assisting smaller businesses to harness their data potential and achieve data readiness.

The points described below are not exhaustive, but a starting point that SMEs can take into account and adapt according to their specific business priorities and resources.

These challenges are interlinked and arise from shared conditions, including limited resources, the lack of a clear data strategy, fragmented data systems, inadequate IT infrastructure, insufficient data oversight, data silos and limited data literacy.

These factors impede data management in SMEs, and raise potential concerns around data protection, security and regulatory compliance.

Here are key actions for stakeholders to help SMEs overcome their challenges, and thrive in their data readiness journey:

To illustrate the transformative power of data readiness, here are two SMEs that have successfully incorporated data into their operations and strategic decision-making:

U-Earth aims to make clean air a fundamental human right through its flagship solution, Pure Air Zone. Based on U-Earth's biotech solutions and protocols, Pure Air Zone includes a real-time data monitoring system that provides practical information on indoor air quality to safeguard people's well-being and offer strategic guidance on environmental impact.

The company has underscored the crucial role of data management practices in bolstering trust and dependability of air quality solutions. They assert that data is a critical asset that has empowered the organization to comprehend and adapt to dynamic and evolving consumer needs, inform the development of new services and products in response to market demand, and track the company's contributions to environmental, social, and governance objectives.

Suwirun is a grower, manufacturer and distributor of a wide range of premium organic teas in Thailand, which uses data management to improve its business operations, optimize manufacturing processes and reduce waste.

Data management has been essential for the company in increasing the traceability of products and raw materials, underscoring the organization's commitment to corporate social responsibility and sustainability goals. This visibility not only helps them obtain certifications for their products and operations-an essential requirement in today's competitive marketplace-but also reinforces their corporate ethos of fair trade, equitable remuneration and diligence in managing their supply chain, and gives them a competitive edge in their industry.

In line with this year’s topic of the World Economic Forum's Annual Meeting of the New Champions 2023 being “Entrepreneurship: The Driving Force of the Global Economy”, the global economy is undergoing a remarkable transformation, with innovation and entrepreneurship at the forefront, driving growth and creating new industry models.

For example, digitally-enabled platform business models, fuelled by frontier technologies like artificial intelligence, immersive technologies and quantum computing, are projected to generate 70% of new value over the next decade.

By embracing the transition into data-ready enterprises and collaborating with vital stakeholders, SMEs can transform their decision-making processes, promptly respond to market trends, streamline operations, capitalize on unexplored growth prospects and ignite innovation across the globe.

We therefore encourage smaller businesses to take into account the opportunities outlined here and adapt them based on their individual business priorities and resources. Such a shift can empower SMEs to flourish resiliently in this digital arena, contribute to the innovation and stimulate sustainable global growth.