SMEs or Small and Medium Enterprises account for over 90% of businesses across the world, playing a leading role in creating new jobs and contributing strongly for national economic development. These businesses are provided new opportunities and challenges through changes in technology, consumer behaviour and global economic updates, which will shape the trajectory of SMEs for the next ten-years to come.
These are some key trends that are changing the direction of entrepreneurship and SMEs, that business owners need to adapt to in order to build resilient and future-centric businesses.
1. Influence of Digital Transformation and Automation
The influence of digital is showing no signs of slowing down. Customers are adopting digital at an exponential rate compared to businesses, which if not acted on quickly, poses a threat to the sustenance of the business in the long run. SMEs, given its smaller size are more agile to shift and adapt to these changes, which will help them to improve their competitive edge against similar businesses in the same industry.
Utilising digital tools and automation technologies to streamline operations, improve customer experience by creating both convenience and complaint-resolution, and scale efficiently, SMEs are poised at a faster rate than it has ever done historically.
The ultimate goal of efficiency is to do more with less; achieve higher productivity throught the utilisation of fewer resources. The plethora of enablers extend from cloud solutions for remote work, to AI-driven customer service to upgraded e-commerce platforms, digital payment systems which makes it easier for SMEs to maintain a lower operational cost, while expanding into new market segments.
Technology and automation is evolving day-by-day to take on the customer-facing role as well; AI-powered chatbots and CRMs tools changing they way how SMEs are providing personalised experiences to customers, with enhanced loyalty management tools constantly expanding on the benefits the business can extend to customers, to ensure longevity of relationship.
The greatest benefit for entrepreneurs out of adopting this trend of digitisation and automation is that it will free up valuable time which can be spent on growth, strategy, and innovation.
2. CSR and Sustainability
Consumer choice has evolved long since the days where the needs to wants were met with one single product. Along with factors such as price sensitivity, enhanced features, and geographical availability, sustainability & corporate social responsibility (CRS) is continuing to solidify its place as a key requirement for consumers when they are making their purchasing decision.
A company’s environmental and social impact is important now more than ever before, pushing companies of all sizes, including SMEs, to adopt these elements into their business model in order to stay relevant. In addition, governments continue to offer incentives for organisation that adopt sustainable business practices; tax breaks and grants for reducing carbon footprints or transitioning to renewable energy sources.
This does not have to a tick-box activity, but rather act as a key differentiator among competitors. The execution options vary from ethical sourcing to embedding eco-friendly practices to the day-to-day operations of the business. Embracing sustainability helps not only build brand loyalty, but also future-proof their businesses against environmental regulations. Not taking sustainability as a key consideration of your business will have negative results if not today, tomorrow.
3. New Work Trends
The COVID-19 pandemic has completely transformed how businesses operate, with remote work becoming a permanent fixture for many businesses of all sizes. The trend toward remote work and distributed teams show no signs of slowing down and will continue to grow, offering both opportunities and challenges for business owners. A Gartner report mentions that 74% of companies plan to permanently shift to more remote work post-pandemic, translated to rethinking traditional office models and embracing flexible work arrangements.
The need to invest in digital infrastructure, collaboration tools, and cloud-based platforms will no longer be a nice-to-have, but a mandatory requirement to support the growing needs of a future-proof workforce. The positive outlook to this is opening up the ability to hire talent from anywhere in the world, enabling SMEs to recruit the most suitable fit to the role and culture, without being limited by geography.
However, achieving successful remote operations will not be a simple task with the requirement arising to adopt new approaches to management, communication, and company culture.
4. Customer is King
SMEs will need to adopt a customer-centric approach, leveraging data and analytics to deliver personalized products, services, and interactions, as consumers raise their expectations for personalized and seamless experiences are growing, supported by advancements in technology.
Customer experience (CX) will increase in value as a critical competitive advantage, driven by personalization. Data and insights will become the driving force of business, with tailored marketing campaigns and customized product recommendations taking the forefront in catering to consumer engagement and loyalty. Entertainment platforms take the crown in setting the standard for personalisation; Netflix and Amazon revolutionising how content is found and consumed.
5. How the Gig Economy plays a part
The gig economy is expected to continue its rapid growth, reshaping the workforce and how SMEs operate. The reliance on freelancers, independent contractors, and gig workers, whether for short-term projects or specialized services has begun to spike, presenting an opportunity to access a flexible and cost-effective workforce.
This enables businesses to either scale up or down based on their unique business demands and avoid the costs associated with full-time employees. SMEs are expected to evolve their hiring practices and shift from a task-oriented working model to a collaboration model to stay competitive.
6. Made local, sold global
With the rise in E-Commerce not showing any signs of slowing down, SMEs are not longer limited to local markets. According to Statista, global e-commerce sales are expected to reach $6.4 trillion by 2024.
The growth of cross-border e-commerce platforms and operation solutions is making it easier for small businesses to tap into global markets, creating new revenue streams, an abundance in growth opportunities and access to a larger customer base. In order to reap these benefits, SME business owners will have to invest in the required assets and processes to succeed in the global marketplace.
In Conclusion
SMEs currently stand at the forefront of innovation, job creation, and economic growth of any nation. With digital transformation, sustainability, and changing workforce dynamics reshaping the business landscape, SMEs must adopt new methodologies and forward-thinking measures in order to build resilient, scalable businesses that thrive in the next decade and beyond.