Issue link: https://maltatoday.uberflip.com/i/1367395
Josianne Cutajar Josianne Cutajar is a Labour MEP 12 maltatoday | SUNDAY • 2 MAY 2021 OPINION DID you know that small and medium-sized enterprises (SMEs) form 99% of all busi- nesses in the European Union? Undeniably, Europe's economy and societies depend heavily on SMEs. It is no different for Mal- ta. Such enterprises not only in- tegrate technological solutions but, time and over again, have proven to be fertile ground for the development of new and innovative technology. This is why SMEs must be at the heart of Europe's industrial and digital strategies. With this in mind, I cannot help but recall an interesting de- bate during a European Internet Forum event, which I co-hosted a few weeks ago, entitled 'The role of SMEs in Europe's digital transformation'. The debate brought together experts in the field, resulting in an interesting exchange of views of how to reach the full poten- tial of SMEs when it comes to digitalisation. The digital trans- formation of Europe's economy as a whole is not only a priority, but will be a key challenge today and for the near future. In or- der to rectify the situation, the EU is defining Digital Targets for 2030, with a focus on digital infrastructure, digital education and skills, digital transformation and also digital government. So, the question remains: how can we make Europe fit for the Digital Decade? As we touched upon earlier, the European Com- mission has set quantitative tar- gets that can be monitored. The proposed Digital Compass will definitely make it easier to follow up in areas that require improve- ment, though we must focus on making the mentioned goals at- tainable and operational. Indeed, the EU has earmarked 20% of the Recovery and Resilience Facility funds as resources to be destined to technology-related priorities, which will go a long way in aiding SMEs go digital, with a particular focus on smaller, less innovative firms. As I always emphasise, "Think small first." Local economic ecosystems The drive for innovation must come from the bottom-up. What I mean from this, is that we need to develop systems that identi- fy, nurture and support ideas at the micro level. I cannot stress enough, therefore, the urgency to involve intermediaries, such as education and research insti- tutions, chambers of commerce and even professionals. Due to their activities being an integral part of the local eco- nomic fabric, they could play a pivotal role in addressing the challenges, gaps and also oppor- tunities that exist for SMEs. Among such challenges we must reduce the 'information and knowledge gap', which many SMEs face when it comes to dig- italisation. We must effectively link technologically advanced SMEs with enterprises lagging behind. The proposed European Dig- ital Innovation Hubs also have an important role to play; they could serve as a means to provide SMEs with the skills, training and assistance required for the adoption of innovative digital solutions. By making these hubs an effective reality, we can help a vast range of SMEs successfully transition, from the small grocer in one of our Gozitan villages to the medium-sized tour operator in Malta. As an MEP, I am committed to making sure that the digital transition will be transforma- tional, long-lasting and most im- portantly, beneficial for SMEs. The EU SME strategy The Commission released the European SME strategy in March 2020. Just 24 hours after the SME strategy was unveiled, the WHO declared COVID-19 a pandem- ic, and a war without rubble en- sued. For over a year now, SMEs, amongst others, have faced the most terrible of consequences, including debt, decreased turno- ver and working capital, as well as vital missed opportunities. In the space of a day, the Commis- sion's strategy became, for lack of a better word: outdated. After much research and work, a year later, we have an official position by the European Par- liament on the SMEs strategy. I negotiated the report for my political group and though the structural challenges were con- firmed, we went on to broaden the horizons, demanding con- crete actions, which would help SMEs weather the storm of the pandemic and face the digital transition with a brand new ap- proach. Since then I have not eased the pressure for the SMEs strategy to be effectively implemented. "SMEs are the motor of our economy and will be the engine of our recovery," said President von der Leyen in the State of the Union address. This is undenia- ble. It is high time to go beyond the mainstream storytelling and act. The way forward Two words come to mind when focusing on the way forward: re- covery and resilience. Recovery indicates the first step to be tak- en. SMEs need to bounce back and recover as quickly as possi- ble. Resilience relates to the way they must recover; new business models must integrate, in all aspects, resilience. It would be useless to rebuild, if we do not rebuild resiliently. SMEs need to be ready for any possible shock in the upcoming decades. Recovering will not be easy; however the EU has taken an unprecedented step. As men- tioned, the Recovery and Resil- ience Facility will support SMEs to recover through digitaliza- tion. We need to do this cleverly, to ensure a swift recovery. All sectors have the potential to build back better. The great- est example of this is tourism, one of the hardest hit sectors which is dominated by SMEs. The recovery of tourism, fuelled by the EU and national funding and assistance, can help SMEs implement new digital and sus- tainable solutions, putting local communities, their well-being and the natural beauty of our is- lands at the center. Digital solutions will undoubt- edly help tourism, such as the use of contactless technologies and software for crowd manage- ment. What is important, how- ever, is that as we move towards a more digitalized economy, we do not lose the human element. Technology might claim some jobs, but there are aspects of human interaction in the work- place that cannot be replaced. The road ahead will be hard, but surely not impossible. The EU and the Member States are putting in place concrete meas- ures to set the foundation of a successful and resilient recov- ery. We all need to play our part, being open and flexible to new arrangements. From my part, I know the SME Strategy can be the core of a new vision for SMEs. I am committed to con- tinue striving for the requests it contains to become reality. Starting small and flourishing: the digitalisation of SMEs