SMEs must embrace digital technology to survive

Girls operating their business. They

Small and Medium Enterprises (SMEs) constitute the biggest segment of the business sector in Uganda. They employ in excess of three million people and account for more than 90% of the private sector. They also contribute more than 70% to the national Gross Domestic Product (GDP).

However, due to technological advancement, the trends in business have evolved, yet most of the SMEs have not positioned themselves to take advantage of the changes. For SMEs to survive and stay competitive, they have to embrace the global business trends in technology. The days of relying on only roadside display as a marketing tool or expecting people to move to you are no more.

The onslaught of e-commerce is real and any business that fails to match this may have little or no chances of survival. A business that lacks basic digital skills may not survive in the next five years. Equipping SMEs with digital skills is critical not only for the country, but also for individual entrepreneurs who want to keep in business.

As part of efforts to address this challenge, the Federation of Small and Medium Enterprises (FSMEs) with support of the Uganda Communications Commission (UCC) is undertaking a countrywide campaign to skill and empower entrepreneurs, especially those in the informal sector, on how to leverage digital literacy, to remain competitive and to keep abreast with new business marketing trends. The campaign seeks to equip SMEs with digital literacy to improve productivity, innovation and competitiveness.

A 2015 study by the FSMEs found that only 9% of the 300 businesses surveyed had their contacts listed online and only 6% said they advertised online. Only 22% admitted to having basic computer knowledge, while just 14% confirmed that they are benefiting from their online engagement. In the survey, most of the businesses recognized that digital illiteracy was hindering them from running their businesses effectively.

 This is why, as stakeholders, we need combined efforts to equip SMEs with basic ICT skills to ensure that they do not miss the business growth opportunities that come with digital literacy in business. I appeal to all stakeholders to support our efforts to scale out digital literacy training among SMEs across the country. With the high level of unemployment, SMEs play a catalytic role in creating low-cost jobs, alleviating poverty, rapidly industrializing and consequently fostering economic growth.

Unfortunately, SMEs are faced with numerous challenges, and that is why most new businesses do not survive to celebrate their fifth birthday. Some of these obstacles include the inability to harness and leverage information and communications technologies (ICT) sufficiently to improve their operational performance and profitability. Under the Rural Communications Development Fund, UCC has been instrumental in supporting the digital literacy and skilling campaign.

However, more stakeholders should get on board to ensure that local SMEs are supported to a level of global competitiveness. The targeted SMEs are being assisted to understand and harness the opportunities that ICT offers their businesses, through improving their skills and capabilities in basic ICT functionalities. Ultimately, these digital skills will foster entrepreneurship, innovation and boost competitiveness of these SMEs.

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Lukwago Joseph grew up in a newspaper family, and rumor has it that instead of playing the guitar in his infancy, his parents put a reporter’s notebook and a pen next to him shortly after he turned born eight years. Before becoming editor of UGANDANZ, Lukwago was a parliament news editor for WBS TV. He joined UGANDANZ in July 2018, A few months after the company launched. Lukwago also spent five years as a freelance reporter, where he covered reporting for the highest bidder, intelligence, foreign policy, and Ugandan police. Lukwago graduated from Makerere University in 2008 with a B.A. in Journalism and worked on his college newspaper.