Financing the digitalisation of small and medium-sized enterprises

Financing the digitalisation of small and medium-sized enterprises
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The study provides an overview of the role of digital innovation hubs and snapshot of the status of digitalisation in Europe.It comes in a very timely moment. The current COVID-19 crisis has highlighted even more the importance of digitalisation. Small and medium-sized enterprises (SMEs) are at the centre of the economic crisis brought on by the COVID-19 pandemic and containment measures, more now than during the 2008 financial crisis. This has clearly shown the importance and the need to accelerate the digital transformation to make businesses more resilient and agile.The study reviews access-to-finance conditions for the digitalisation of SMEs and the role of digital innovation hubs as key enablers in the wider ecosystem. It highlights how the propensity to digitalisation and digital maturity of SMEs is not only affected by financial factors (access to finance) but also by non-financial factors (knowledge and ambition to digitalise). In particular, the study shows the crucial role of digital innovation hubs and the wider eco-system in supporting the digitalisation of SMEs. Many digital innovation hubs have taken rapid actions to respond to the COVID-19 crisis and better help SMEs in the current circumstances.The study was carried out by InnovFin Advisory in collaboration with the European Investment Advisory Hub, with the support of Gartner.

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Группа авторов. Financing the digitalisation of small and medium-sized enterprises

Table of contents

Financing the digitalisation of small and medium-sized enterprises

Executive summary. Context and study approach

Snapshot of the status of digitalisation in Europe

Key findings

Recommendations

Recommendations focused on supporting the ecosystem

Recommendations focused on access to finance

Dedicated initiative for the CESEE region

1.Context and study approach. 1.1Context

1.2Approach

1.3Methodology

2.Snapshot of the status of digitalisation in Europe. 2.1Trends of digitalisation in Europe and expected growth

2.2The digital profile of small and medium-sized enterprises: Digital adopters and digital natives

2.3Ecosystem and enablers for innovation and digitalisation

2.4Ecosystem and enablers for innovation and digitalisation: Overview of national and European programmes

2.5Selected examples of digitalisation programmes worldwide

3.Key findings

3.1Finding 1: Digital innovation hubs are critical enablers with strong potential to strengthen their offerings

3.2Finding 2: Public funding is dominant in digital innovation hubs, but new financing models are emerging

3.3Finding 3: Perceived complexity and low visibility limit demand for funding from public digitalisation programmes

3.4Finding 4: A key barrier to digitalisation of small and medium-sized enterprises (different manifestation for natives versus adopters) is the lack of knowledge

3.5Finding 5: Financing of digital projects is limited by the knowledge gap of banks

4.Recommendations

4.1Recommendation 1: Strengthen digital innovation hubs’ reach and role in helping small and medium-sized enterprises to access financing support

4.2Recommendation 2: Diversify funding sources where possible and support digital innovation hubs to develop more commercially-oriented business models

4.3Recommendation 3: Develop a central platform to drive awareness and ambition

4.4Recommendation 4: Develop a voucher scheme to provide technical assistance to small and medium-sized enterprises and a marketplace to facilitate matchmaking

4.5Recommendation 5: Explore the development of dedicated financial instruments to support digitalisation

4.6Recommendation 6: Consider developing dedicated equity instruments and/or higher risk-absorption debt products for growth capital to support disruptive digital technologies

4.7Recommendation 7: Further investigate opportunities for dedicated financial instruments and dedicated advisory services for the CESEE region

List of figures

List of tables

Notes

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Foreword by Lilyana Pavlova

Foreword by Roberto Viola

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2.4Ecosystem and enablers for innovation and digitalisation: Overview of national and European programmes

2.5Selected examples of digitalisation programmes worldwide

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