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SME acceptance of the digital transformation

Author Cho, Youngsam Date 2020.12.02 Issue No

As smart manufacturing and the digital transformation are being emphasized during the Fourth Industrial Revolution, the acceleration of the digital transformation has emerged as a key issue. However, discussions on the digital transformation at SMEs are lacking.


While SMEs may create new opportunities for growth by preemptively adopting digital transformation technologies, they also face the risk of being alienated due to delayed innovation, and thus need to see the digital transformation as both a challenge and a threat.


It is worth noting that the digital transformation creates new value and business models through the application of digital technology, going beyond the optimization of production processes or productivity enhancement.

● A short-term approach aimed at boosting production efficiency and reducing costs, instead of a vision that aims to create new demand and added value, may lead to investment costs ultimately outweighing benefits.


According the results of several studies, the level of digital transformation at Korean SMEs is low and the nature it has taken is inadequate.

● An comparing the efforts made at domestic SMEs and SMEs in the Asia-Pacific region to adapt to the digital transformation reveals the efforts at domestic firms to be especially inadequate.


The digital transformation at SMEs needs to satisfy numerous functional conditions, including technology, operating capability, and acceptance, and among them, acceptance by SMEs of the digital transformation is the most critical factor, as there are many constraints to SMEs implementing the digital transformation.


To increase acceptance, a vision of the expected benefits of digital transformation needs to be presented and a systematic investigation of the status quo and the development of policies reflecting it are essential. Support for the research, distribution and expansion of a digital transformation model and the operational forms of the digital transformation, as well as the development of effective education and training programs, are also advised.

● In addition, over the course of policy implementation, clearly defining the goals of the digital transformation, faithfully reflecting reality, and emphasizing qualitative goals and performance is critical.?