The Effective Use of Digital Technology by SMEs

The Effective Use of Digital Technology by SMEs

Antonios Georgios Zairis (Neapolis University, Cyprus)
DOI: 10.4018/978-1-7998-3648-3.ch014

Abstract

Most researches emphasize the importance of small and medium-sized enterprises (SMEs) as main contributors to economic growth and their role in the global economy. The purpose of this study is to provide information on the implementation of digital technology in SMEs and the challenges they face. It seems that the evolution of internet technology and communication platforms has been largely adopted in the corporate environment and constitutes an important component of competitive advantage for large corporations. But the same does not exactly apply for SMEs as they come up against numerous issues. The chapter also focuses on the digital state of Greek SMEs and attempts to identify the main problems and opportunities for promoting their development through digital technology, as they appear to be weak in this field especially when comparing to the majority of European countries. These findings enrich the literature on Greek SMEs and their future capabilities.
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Introduction

Although the subject of digitalization in SMEs is not new, it is a very much alive issue and its analysis remains highly topical. Digital technology is an integral part of the future industry, and it is no secret that it is reshaping the world economy. Its use can enhance the performance of SMEs and offer them more opportunities in order to compete with their larger competitors (Cenamor et al., 2019). It is also well known that innovation and the use of new digital technologies is the key to a company’s survival in today's competitive business environment (Kavoura and Andersson, 2016; Kavoura and Koziol, 2017; Makarona and Kavoura, 2019). And innovation it does not always mean complicated and costly processes (Masouras, 2019).

New technologies have emerged, such as cloud computing, communication platforms, data analytics, big data, automation, robotics, artificial intelligence, machine learning, virtual reality and even 3D printing that offer new opportunities for small enterprises (Ulas, 2019). However, up taking new digital technologies proves to be uneven and depends on many factors such as the size of the company or the country’s level of economic development, and also politics and regulations (Chakravorti et al., 2017). It seems that one of the inherent advantages that larger companies have (over the smaller ones) is their ability to adopt digital technologies more easily, as they have the capital and human resources to do so. In Europe, larger corporations employ more IT/ICT specialists and use data sharing infrastructure (e.g. ERP) and cloud computing more often than smaller companies. On the other side, almost half of European SMEs (44%) use social media to promote their business. Regarding the use of mobile internet by SMEs, there has been an increase from 20% to 29% (2012-2016) while it remains stable (64%) for the bigger firms (European Commission, 2017).

This article aims to provide an overview on the use of digital technology by SMEs specifically in Greece. It analyses the concept and importance of SMEs in the country’s economy and focuses on their course over the last eight years. This is followed by a description of the country’s digital status and the use of digital tools by Greek SMEs. The final section contains the concluding remarks.

Key Terms in this Chapter

SME: A micro, small or medium sized company.

Family-Owned Firms: A type of business organization in which two or more family members are involved in the management and the majority of ownership or company control lies within the same family.

Digital skills: ? range of technical skills and abilities associated with understanding and using communication applications, networks and digital devices in order to access and manage information.

Digitalization: The use of digital technologies and digitized data in the way companies operate and communicate with their customers.

ICT: An umbrella term that refers to Information and communications technology.

Big Data: A large amount of information about an organization (both structured and unstructured) that cannot be analysed using traditional computing methods.

Digital Economy: An economy that is based on digital technologies and the Internet.

Digital Footprint: The information left behind as a result of digital activities and communications stated on the Internet.

Communication Platforms: Digital media (e.g. Facebook, Instagram and Twitter) that are used as means of communication. In marketing, they provide information and awareness about a specific product or brand.

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