The digitalization of small and medium businesses in the Philippines could add between $26 billion and $28 billion to the gross domestic product by 2024 and contribute to economic recovery post-COVID-19, according to the 2020 Asia Pacific SMB Digital Maturity Study.
The study, commissioned by Cisco and conducted by International Data Corp., shows that SMBs in the Philippines are moving closer to the Digital Observer stage, although 73 percent are still in the first stage of Digital Indifferent.
According to the study, local SMBs are prioritizing improved customer experience and service delivery as the main drivers for digitalization. More specifically, 26 percent of SMBs are aiming to improve customer experience, 22 percent are aiming to improve service delivery, and 19 percent are focused on improving marketing and sales.
These are positive and significant developments, given that SMBs account for 99.6 percent of all businesses, 62 percent of the country’s total employment and contribute 36 percent to overall GDP, making them a critical component to the Philippines’ trade and commercial landscape.
The resilience, agility and digital transformation capabilities of SMBs will play a pivotal role in the country’s post-COVID-19 economic recovery.
“The SMB sector has been among the hardest hit by the COVID-19 pandemic. However, the country’s SMBs have shown great resilience, and have leveraged technology to continue to operate and serve their customers during the period,” said Karrie Ilagan, Managing Director for Cisco Philippines.
“As the Philippines continues to overcome the current situation, and consumer and business activity starts to pick up, digital transformation of SMBs will play a pivotal role in their recovery and contribute to the country’s overall economic growth. At Cisco, we are committed to work with SMBs to help them emerge stronger with the right digital solutions and strategy,” Ilagan said.
The results of the study show that AI or analytics (18 percent) is the top technology investment priority for SMBs in the Philippines, followed by cloud technologies (15 percent) and purchasing or upgrade of IT infrastructure software (11 percent).