Adopting technology intelligently
NEW TECHNOLOGIES WILL LEAD TO HIGHER REVENUES AND MORE JOB CREATION FOR THE ECONOMY
Pace of innovation is accelerating at a faster pace than before and SMEs need to embrace currently available technologies
The pace of technological innovation is accelerating at a faster pace than before and small- and mediumsized enterprises (SMEs) need to embrace currently available technologies to stand head-tohead with their peers and be prepared for the next wave.
Even though SMEs constitute nearly 95 per cent of the companies in the UAE, only around 21 per cent of them have deployed modern IT solutions, Haider Salloum, small and medium business director at Microsoft Gulf, said in an interview.
He said that businesses that embrace technology to reinvent themselves and their industries will thrive while those that choose to hang on to the status quo risk extinction.
SMEs, key driver of economic growth in the country, contribute around 40-50 per cent to the GDP of the UAE and have employed more than 65 per cent of the population.
The National Agenda, established to achieve its UAE Vision 2021, aims to ensure that SMEs’ contribution to non-oil GDP reaches 70 per cent by 2021.
The principles of innovation enable individuals and organisations to achieve more, Salloum said, and added that SMEs are at the forefront of innovation.
“The level of IT adoption is not where we wanted it to be. In the medium segment, the adoption of IT is better, but when we go to the smaller segment the adoption rate goes down,” he said.
IT adoption means having a dynamic website, modern email system, storage and backup facilities in the cloud, CRM (customer relationship management), ERP (enterprise resource planning) or bookkeeping facilities.
Why is IT adoption important?
Companies that use technology have better ability to export and they have 30 per cent higher ability to hire more people, he said.
“Companies that leverage IT actually become more competitive, agile, innovate and able to compete better in the local and global marketplace,” he said.
The new digital divide threatens to widen the “performance gap” of SMEs as the pace of IT innovation accelerates. SMEs range between 160,000 and 300,000 entities, depending on the business. Enterprises that have less than 250 staff are considered SMEs.
According to Dubai SME, the agency of the Department of Economic Development (DED), micro enterprises account for 72 per cent of the business population in this city, small enterprises constitute 18 per cent and mid-sized businesses another five per cent.
Mid-sized businesses contribute about 17 per cent to Dubai’s economy while the respective share of small enterprises is 14 per cent and that of micro-enterprises is about 8 per cent.
In the trade sector alone, SMEs account for 47 per cent of GDP while the respective share in the service sector is 41 per cent and 13 per cent in the manufacturing sector.
Today, Salloum said the millennial generation has started to go to the marketplace. When they go the marketplace, they expect to find these technologies available.
They use more technologies at home rather than in the office and that creates dissatisfaction with the work environment and productivity goes down.
Quoting a Boston Consulting Group report, Salloum said that companies that adopt IT can increase their revenues by 15 per cent more than their peers.
The level of IT adoption is not where we wanted it to be. In the medium segment the adoption of IT is better, but when we go to the smaller segment the adoption rate goes down.” Haider Salloum Small and medium business director at Microsoft Gulf
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