Why Europe needs to support our small and medium businesses

By Joakim Reiter, Vodafone Group Chief External and Corporate Affairs Officer

Ice-cream maker Santini is a Portuguese institution. Founded in Cascais in 1949, it now offers more than 70 flavours across 12 branches, all of which need to guarantee the same excellent quality as the beloved, original store. Temperature control is, naturally, a crucial factor for ice-cream making, so Santini installed eight sensors in each store, linked to a central system using Vodafone technology that alerts Santini managers by SMS or email to any major temperature changes.

Backbone of our economies

There are an estimated 22 million small-and-medium-sized enterprises (SMEs) in Europe. These are the businesses in our communities who you support on a daily and weekly basis. They are the backbone of our economies, yet many are struggling to get back on track after three years of overlapping crises, starting with the pandemic, and now the rising costs of living.

Just as digitalisation is changing the way we live; digitalisation is changing the way SMEs run their businesses. In fact, digitalisation is an essential part of growing their businesses. It can bring more effective processes (like the Santini ice cream maker in monitoring important temperature changes), greater efficiency and productivity through managing energy consumption or supply chain. Using digitalisation to take on the important everyday tasks also gives the SME owners to explore new ways to expand their business and serve their customers.

Challenges to digitalisation

But yet with all this promise of digitalisation for SMEs, Europe’s SMEs are lagging. In our recent survey of 3,358 small businesses across 11 European countries (out of which 2,677 in 9 EU Member States - Czech Republic, Germany, Greece, Ireland, Italy, the Netherlands, Romania, Spain, and Portugal), we found a clear digital disparity between SMEs and larger enterprises.

For many SMEs who are trying to run their businesses and are already stretched, they don’t have time to devote to transforming their business to a digital one and the journey to get there can be intimidating if you’re not an expert. The survey showed that a lack of funding, digital skills, time and resources, complicated processes to apply for funding and concerns about security are the key barriers to why digitalisation isn’t happening faster for SMEs.

The Digital Transition is one of the EU’s top priorities. The Digital Decade targets set by the European Commission aim for more than 90% of SMEs to reach at least a basic level of digital intensity and for 5% of EU companies to be using Cloud/AI/Big Data by 2030.

With SMEs accounting for more than half of Europe's GDP, and representing 99% of all businesses in the EU, there is a greater need to act now to support them become digital.

Collaboration is critical

At Vodafone, we offer V-Hub to SMEs which helps small businesses access digital skills expertise, providing free one-on-one support and access to an up-to-date online knowledge centre. Cybersecurity risks, remote working issues, and insights into digital marketing strategies are some of the topics covered.

Since its launch in 2020 V-Hub has helped more than 4.7 million Small and Medium Enterprises (SMEs) across 15 countries including Germany, Spain, Italy, UK, Hungary, Albania, Greece, Ireland, South Africa, Romania, Czech Republic, Portugal, Netherlands, Turkey and Egypt.  

While Vodafone is actively supporting SMEs, digital success won’t come for Europe’s SMEs with us alone. Which is why industry and governments must come together to make a difference. As a collective we could move faster on critical elements like prioritising the roll-out of high speed, quality connectivity and making it easier for SMEs to apply for funding and the support they need.

A competitive and successful SME sector will contribute to Europe’s economic success. Vodafone is already on the side of SMEs. It’s time now for others to join us.

This article was first published in The Brussels Times on Monday 6 February, 2023.