How Digital Are German SMEs in 2021
While the COVID-19 pandemic has undoubtedly spurred digitization, this does not mean that all SMEs are as digital as they should be. Come read our article to learn more.
Deutsche Telekom's Digitalization Index for SMEs 2020/2021, which polled over 2,000 SMEs, depicts the status of digitalization in the German SME sector. According to the study, the COVID-19 pandemic has accelerated digitization, but many businesses are not nearly as digital as they want to be.
Most Businesses Fared Well During the Crisis
More than half of the surveyed companies introduced new home office workplaces or expanded the range of digital services offered. 46% adapted digital business models, products, and services at short notice during the pandemic. On the other hand, that also means more than 50% have not!
"It's no surprise: companies with a high degree of digitization come through crises better," says Hagen Rickmann, Managing Director of Business Customers at Telekom Deutschland. "The results also show that almost half of the companies are expanding their digital offerings and want to drive forward the digitization of their processes. This is a positive development."
Digital Gap Widens
The digital transformation is particularly obvious in productivity (+4 points from 2019), which helps SMEs boost workflows and structures via mobile and flexible working, moving workstations to the home office.
The biggest problem is finding talents, and digital projects had to be postponed due to a lack of technical expertise. One in two didn't have employees for digitization during the pandemic; therefore, SMEs must strengthen cooperation with each other. They need the exchange of digitization methods and have to make guiding projects and successful practical examples even more evident.
Companies in the industries hit harder by the crisis had to cut investments, including digital innovation projects. These include, for example, the hospitality industry and arts and entertainment. 18% of surveyed companies are thus putting their investments on hold for the time being. On the positive side, 60% of companies are sticking to their IT budgets. Their priority is mobile devices, communication and collaboration tools, VPN solutions, data protection, and security.
Different industries have achieved different levels of digital penetration, widening the digital gap. SMEs have made big progresses in the financial industry, transport and logistics, and communications. Industries that lack behind are construction and commerce, indicating that SME digitization has made a significant leap forward during the crisis.
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