The Minister for Trade, Employment, Business, EU Digital Single Market and Data, Pat Breen has welcomed a report entitled The Digitalisation of small and medium enterprises in Ireland from Andrew McDowell, Vice President of the European Investment Bank.
The report, a collaborative project between the Advisory Hub of the European Investment Bank and the Department of Business Enterprise and Innovation, investigates how to increase digital technology diffusion among Irish SMEs, especially in traditional sectors.
The report highlights that almost 40% of traditional Irish indigenous companies completely lack digital assets and Ireland lags behind leading countries in terms of e-business processes and e-business technology adoption.
The project also found a limited appetite from traditional Irish SMEs for digital investment in products, process or business models due to the existence of market failures in relation to accessing finance and awareness of the benefits digital technologies can bring.
The report finds that companies are often working with a budgeting logic instead of an investment logic and digitalisation is considered to be a cost factor and not seen as an opportunity. Ultimately, not enough companies know how to translate the use of technologies into economic impact, and how to build a new incremental business.
Furthermore, the report finds that SMEs are often unwilling to apply for loans given the high cost of credit in Ireland. Banks are reluctant to provide loans, often with a higher risk profile, for investments in digital technologies.
Speaking last week, Minister Breen said, "In light of the continuing commitment to ensuring SMEs have appropriate access to credit, I am delighted to announce that the Department of Business, Enterprise and Innovation is in the process of developing a pilot scheme aimed at addressing the difficulty that SMEs have in accessing finance in order to obtain the benefits of digitalisation."
He added, "The development of this pilot, combined with the Future Loan Growth Scheme to be launched in the coming weeks, are targeted Government of Ireland measures to address a clearly defined market failure in that they will provide competitively priced finance on favourable terms to eligible SMEs."
Source: www.businessworld.ie
