Tech tops business priorities
Across Asean, Thailand had the highest proportion of respondents prioritising technology investments in 2020, as small businesses in the region count on technology to help them overcome the impact of the Covid-19, a survey by United Overseas Bank (UOB) found.
Technology was ranked the top investment priority for 2020 by two in three (64%) small businesses, including those who currently have cash flow concerns. This is according to a recent survey of 1,000 Asean small businesses conducted by UOB, Accenture and Dun & Bradstreet. The research sought to understand how small firms were adapting to the business environment given the changes brought on by the pandemic.
The Asean SME Transformation Study 2020 was conducted among 1,000 small businesses with an annual turnover of US$20 million (626 million baht) and under, before and during the Covid-19 pandemic in the third quarter of 2019 and May 2020 respectively, across Indonesia, Malaysia, Singapore, Thailand and Vietnam.
While 71% of respondents in Thailand prioritised technology investment this year, the number was followed by Indonesia (65%), Vietnam (63%), Singapore (60%) and Malaysia (59%).
The survey found small businesses across Asean are persevering in their efforts to invest in technology even when faced with the prospect of declining revenue.
Although close to nine in 10 (88%) of these businesses have lowered their revenue expectations in 2020, almost half of them (44%) still plan to increase their overall technology budget. This suggests Asean small businesses are looking beyond the present challenges and are set on adopting technology to improve their competitiveness and sustainability.
Lawrence Loh, Head of Group Business Banking, UOB, said, "Having had to cope with the disruption to their operations as a result of Covid-19, many of these firms realised quickly that technology can make all the difference to their business. Whether in revising their business models or even transforming their operations, small businesses are responding to the changes brought about by the pandemic by turning to technology to ensure their long-term viability and competitiveness."
By industry sector, small businesses from the food and beverage, information and communications technology and healthcare sectors (50%) indicated the strongest desire to boost their technology investments, followed by those in the construction (48%) and retail (46%) sectors.
Beyond technology, Asean small businesses are looking to invest in developing their employees' skills (51%) and in machinery or equipment (40%). Their lowest investment priority is in motor vehicles (18%).
As small businesses across Asean embrace technology as a means of ensuring a more sustainable business model for the long term. Eight in 10 small businesses across the region ranked the use of digital solutions as their most preferred cash flow management method. For instance, digital solutions such as UOB BizSmart enable small businesses to issue electronic invoices to manage their account receivables more promptly, the survey said.
Divyesh Vithlani, who leads Accenture's financial services practice in Southeast Asia, said, "As more small businesses prepare to reopen after a very challenging period, their focus on technology will further intensify as they look to reinvent themselves to ensure long-term competitiveness and resiliency."