SINGAPORE (July 2): Small businesses in five Asean markets – Indonesia, Malaysia, Singapore, Thailand, and Vietnam – are counting on technology to help them tide over the Covid-19 outbreak crisis, according to a recent survey conducted by United Overseas Bank (UOB), Accenture, and Dun & Bradstreet.
The research sought to understand how the small firms were adapting to the business environment given the changes brought on by the pandemic.
The survey was conducted in the third quarter of 2019 and May 2020 during the Covid-19 pandemic. The survey sampled 1,000 small businesses in the five Asean countries that had an annual turnover of $20 million and below.
Of the respondents, around 64% of them, including those who currently have cash flow concerns, rank technology as the top investment priority for 2020.
Although some 88% of these businesses have lowered their revenue expectations in 2020, almost half of them (44%) still plan to increase their overall technology budget.
This suggests that ASEAN small businesses are looking beyond the present challenges and are set on adopting technology to improve their competitiveness and sustainability, say the companies in a statement.
Across the countries, Thailand had the highest proportion of respondents (at 71%) prioritising technology investments in 2020. This was followed by 65% in Indonesia, 63% in Vietnam, 60% in Singapore, and 59% in Malaysia.
By industry sector, about 50% of small businesses from the food and beverage (F&B), information and communications technology and healthcare sectors were looking to boost their investments in technology. This was followed by 48% in the construction sector, and 46% in retail trade.
Following technology, some 51% of small businesses surveyed said they were looking to invest in developing their employees’ skills, and in machinery or equipment (at 40%).
The lowest investment priority among small businesses are in motor vehicles at 18% indicating it as a priority.
Small businesses across Asean are already recognising technology as a means of ensuring a more sustainable business model. Some 81% of small businesses across the region ranked the use of digital solutions as their most preferred cash flow management method.
“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,” says Lawrence Loh, head of group business banking at UOB.
“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 adds.
“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-19 will be fundamental for a speedy recovery of ASEAN economies,” says Divyesh Vithlani, who leads Accenture’s financial services practice in Southeast Asia.
“While ASEAN small businesses are facing current challenges brought about by COVID-19, we can see that they are still taking practical steps to increase their business’ resilience to prepare for the future. Firms which transform their business models for the long-term, even after COVID-19, will be better poised to tide through these current challenges and to create new business opportunities,” says Audrey Chia, CEO at Dun & Bradstreet Singapore.
