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SME’s represent over 90% of the companies globally.
Internet of Things will be the driving force for the industrial revolution 4.0. With its vast capabilities, it is already permeating many well-reputed organizations. Many big tech organizations are indulged in heavy investments. A report by the World Economic Forum states that larger businesses are leveraging this technology six times more than that of Small and medium enterprises. This means that SMEs are at a loss as they can’t deploy this technology. Moreover, without their ability to leverage this technology, global productivity is lagging. The same report by WEF states that SME’s represent more than 90% of the companies globally and are the primary drivers of social mobility, thus creating 7 out of 10 jobs.
A Project was compounded by WEF to address the challenge by SME’s for leveraging IoT. In this article, we will observe the highlights of challenges and policies suggested by the World Economic Forum.
Challenges by SME’s
The Project named “Accelerating the Impact of Industrial IoT in Small and Medium-Sized Enterprises: A Protocol for Action” has ruled out some challenges that need to be addressed by the leaders and organizations before IoT can be implemented in SME’s. These challenges include lack of access to capital and unclear returns on investment; a need to revamp their firm’s infrastructure and processes; a need to update information technology and operational technology; and navigate a nascent technology landscape that is currently poised to serve larger companies.
Policies to Address the Challenges
The researchers at the World Economic Forum have listed out the following policies for quicker adoption of IoT in SMEs.
1. Raising Awareness- One of the most common issue with no adoption of IoT amongst the SME’s is the lack of knowledge amongst these organizations about IoT. To counter this, the World Economic Forum has listed out areas where the SME’s must focus. SMEs must analyze their readiness for adopting IoT with a maturity assessment tool. This tool includes surveys to evaluate their readiness along several dimensions and compare their maturity to other companies in the same sector, region, or value chain. The findings of such a survey can help inform their Fourth Industrial Revolution investment strategy, identify gaps and strengths, and will be conducive to pinpoint potential use cases to prioritize. Additionally, these organizations can start IoT demo, in the factories and enterprises to familiarize them with this technology.
2. Expert Support- Any organization needs support before piloting on any technology. By extending support, experts can help the SME improve access to a skilled workforce and build confidence in the technology. The experts can support the SME’s by providing training to the workers while using the technological equipment to become habituated with utilizing IoT daily. Moreover, by narrating the importance of business and technology to work together, experts can build strong SME leaderships. Using open-source tools under the guidance of experts, SME’s can make the internal architecture ready for IoT adoption. As each business faces unique challenges, they are liable to different solutions. Thus, with expert advice, each SME can formulate a customized strategy for future challenges.
3. Financial Support- One of the critical challenges that SME’s face while deploying any new technology is the dearth of funds. Industry leaders can thus provide monetary assistance to SME’s for overcoming this challenge. The monetary assistance includes financial support in the form of grants to de-risk. It incentivizes SMEs to experiment with IIoT technology adoption, lowering the cost of business consultancy services and expert technical support, training employees or managers at SMEs by granting loans, encouraging SME digital transformation by providing structured loans and credits. This will encourage SME’s for quicker adoption of IoT and addressing the barriers that SME’s often face in accessing financing.
Conclusion
The project report states that implementing technology in SMEs accelerates the agenda of the fourth industrial revolution. Moreover, it unlocks significant social and economic benefits. The leaders from the public and private sectors must come together to assist SMEs in digital transformation.