Small goes digital : how digitalization can bring about productive growth for micro and small enterprises

In short, MSEs are key to attaining the Sustainable Development Goals, which were launched by the United Nations in 2015 as “a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity“.1 An important objective is therefore to create an environment in which MSEs are enabled to harness digitalization for productivity growth and for the creatio [...] The analysis conducted for this report builds on the notion of capabilities to capture the intangible assets within an MSE that influence its susceptibility to, and ability to benefit from, digitalization – notably the collective skills, attitudes and expertise of the enterprise’s owner and staff. [...] The opportunities discussed are: (a) increased access to information and an improved ability to communicate; (b) the ability to trade and to access markets more easily and over greater distances; (c) access to a variety of financial services with low barriers to entry; (d) new pathways to enterprise formalization; (d) digital transformation and entrepreneurship as fundamental shifts in value creat [...] The importance of micro, small and informal enterprises for employment and conditions of work has long been emphasized in studies by organizations such as the ILO and the World Bank and by development economists (Bruhn and McKenzie 2014; ILO 2013; ILO 2015a; La Porta and Shleifer 2014). [...] Again, the difference up-to-date and realistic picture than between the relative contributions of the earlier studies, which had tended to informal and formal sectors to employment underestimate the role of small economic is starkest in low-income countries (85 per units – that is, of the self employed, cent versus 15 per cent), with lower-middle microenterprises and small enterprises.