DTI survey: Majority of MSMEs fail to digitize their operations
Majority or 73 percent of the country’s micro, small and medium enterprises (MSMEs) have difficulty digitizing their operations, according to a survey by the Department of Trade and Industry (DTI).
During the virtual Small Business Corp Virtual Event: "The New Normal is Digital: Business Solutions for MSMEs." DTI Secretary Ramon M. Lopez said that DTI’s e-Commerce Group conducted a baseline survey in September last year to determine the level of digitalization of Philippine MSMEs and compare it with the ASEAN data.
“Results showed that the majority of the respondents— or around 73%-- need capacity-building related to digitizing their business,” said Lopez.
Skills that local MSMEs need to acquire vary by region and by e-commerce engagement. For example, those who are engaged in e-commerce prefer to focus more on improving digital skills while those who are not engaged in e-commerce prefer skills on how to get started with an online business.
Among the top needed skills identified by respondents are financial, marketing, content management, basics of e-commerce, and starting an online business, he added.
Despite limitations in technology infrastructure, Lopez said that more MSMEs are conducting their businesses online amidst the pandemic—which is why their digitalization plays a crucial role in developing an inclusive and sustainable economy.
To this end, he said that DTI has been implementing programs and policies that would help to facilitate the transition of MSMEs into digital and making sure they’re properly equipped in the process. The programs in the DTI’s 7Ms Framework—which includes Mindset, Mastery, Mentoring, Money, Machines, Market Access, and Models of Negosyo—also already include digitalization as well.
For example, the DTI launched the Negosyo Center Online Portal (NCOP) last June to promote ease of doing business and facilitate access to business services by making available online all the services provided by our brick-and-mortar
In addition, the DTI has strengthened the Business Name Registration System (BNRS) Next Generation, an online three-step process—APPLY, PAY, DOWNLOAD—that helps proprietors register their business names within 8 minutes. This process can be even experienced through the mobile phone.
Lopez said these efforts could have helped the rise in the number of business names registration, which increased by 44 percent last year, from around 637,000 transactions in 2019 to around 916,000 transactions in 2020.
Year to date, there are around 658,000 total business names registrations. And there are currently more than 3.7 million active business names registered in the BNRS from 2016 to present.
Meanwhile, the CTRL + BIZ: Reboot Now! program offers a series of free webinars that are targeted to MSMEs who need to transform their business digitally. Likewise, the Philippine Trade and Training Center-Global MSME Academy (or PTTC-GMEA) offers training and workshops with over 300 modules on digitalization and innovation.
Additionally, the Kapatid Mentor ME (KMME) program, which provides mentorship to MSMEs, is now online to ensure participants’ safety due to the pandemic.
“And at the height of the community quarantine, we consolidated online tools to help MSMEs find digital solutions to help them cope with the challenges of the pandemic,” he added.
In terms of market access, MSMEs are encouraged to join in Virtual National Trade Fair to the online channels of OTOP Philippines Hub, as well as Go Lokal’s partnership with e-commerce platforms like Shopinas and Lazada.
Lastly, the DTI has also updated the e-Commerce
Lastly, he said, a Digital Philippines is already happening, accelerated mainly by the pandemic.
He cited SBCorp for understanding the importance of digital adoption. The micro lending agency of the government has digitalized their loan applications so that they could still serve our MSMEs despite the pandemic. In addition, SBCorp has been providing support to their borrowers to strengthen their businesses in their pivot to digitalization.
“We are confident that our country can handle this transition only if we work together. Through a whole-of-society approach—where businesses, industries, and people move as one—we can build back better as an entirely transformed digital nation where our people can enjoy a more comfortable and greater quality of life,” he said.