Data security SMEs' top technology concern, says report

More than 60 per cent of SME leaders believe data security or privacy is a major concern that inhibits technology adoption, says a report commissioned by Microsoft and drafted by Boston Consulting Group (BCG).

The report, Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders, is based on primary interviews with 4,000 SMEs in five developed and emerging countries - Brazil, China, India, Germany and the US - in addition to secondary research in 19 other countries.

Among the key guidelines for policymakers to encourage tech adoption by SMEs is ensuring access to world-class infrastructure and networks. To connect, collaborate and compete, SMEs need information and communications technology (ICT) networks that are accessible, affordable and secure. Secondly, policymakers need to support policies that address data security concerns. Risks of hacking are likely to grow as more companies embrace big data and more data moves to the cloud.

Policymakers also need to support innovation with a flourishing local IT ecosystem. Most SMEs do not have their own senior executives skilled in IT acquisition and implementation, which makes them depend on local IT vendors. A flourishing network of hardware vendors, value-added resellers, systems integrators, service providers and software developers can provide SMEs with much-needed local support.

Thirty-one per cent of Indian business owners claim that they haven't adopted new technologies because their employees lack sufficient skills, training and exposure to IT. Governments and schools should collaborate with SMEs to identify key skills gaps and address them through job-training programmes, the report says.

In many countries, women have less access than men to the education and technology that inhibits them from starting their own companies. However, the report shows that SMEs founded by women are among the most technically advanced, innovative and successful, pointing to the need for policymakers to level the playing field and make IT more accessible to female entrepreneurs.

There is also a need to reduce counterproductive government-imposed costs such as heavy import duties, taxes, regulations, and expenses associated with compliance, which inflate technology costs. The government needs to bring consistency to its policies on taxation, protective tariffs and regulatory expenses.

Lastly, policymakers need to support market-driven standards and interoperability - initiatives that will allow SMEs to create solutions compatible across markets around the world. Certification of vendors to relevant international standards assures SMEs that a minimum level of security, privacy and data protection is in order. SMEs will also gain access to a more global base of potential customers this way.

The SME decision-makers surveyed need to build a technology skills base and reconsider the cost factor when it comes to technology investments, the report says, adding that it is important for them to embrace new pay-as-you-go options. Furthermore, SMEs that are trailing on technology must learn from technology leaders and adopt the solutions that match their own and potential customers' expectations.

BCG estimates that if more SMEs employed the full range of available IT tools - including basic productivity software, internet connectivity and new cloud-based services - SME revenue could grow by a combined $770 billion in the US, Germany, China, India and Brazil, while generating over 6.2 million new jobs in these countries.

The founders of businesses created in the past three years are about 1.5 times more likely than the founders of older businesses to credit technology for their existence, the report says, highlighting the importance of technology adoption by SMEs.