Immediate release: Thursday, 12 January 2012
SME Survey 2012: Competitive businesses are online
Small and medium enterprises (SMEs) that embrace technology are more competitive than those that do not. Recent findings suggest that with the current economic situation, fewer SMEs consider their businesses to be competitive. Despite this, those small to medium organisations which have an online presence still believe that their businesses remain top performers.
These are among the core findings at the halfway stage of SME Survey 2012. Since its inception in 2003, the SME Survey has had the express intention of determining the impact of IT on competitiveness.
Principal analyst Arthur Goldstuck describes the importance of an online presence as a crucial finding. “Those with a website are also more likely to be users of Internet and related technology tools which, when used appropriately, can deliver substantial efficiency benefits,” he asserts.
Determining competitiveness is based on four factors. These include a company’s ability to grow profits; its ability to grow revenue; its ability to build market share or compete with similar organisations; and its ability to cut costs.
“The latest survey indicated that fewer SMEs today regard themselves as competitive, when compared to previous years. Only 65% of those surveyed considered themselves to be competitive, compared to 75% in the past. This is clearly a consequence of the recent recession and the global financial crisis,” Goldstuck says.
However, some 68% of those with a website regard themselves as generally competitive, with 45% regarding themselves as highly competitive. For SMEs without their own websites, these figures were, respectively, 59% and 38%.
When considering profitability rather than perceived competitiveness, the difference is even more dramatic: 79% of SMEs with a website report that they are profitable, while only 59% of those without a website report profitability. And for those reporting ‘strong profitability’, “Of those with a website, 30% claim to be strongly profitable, compared to just 14% of those without.”
Surprisingly, the 7% which reported that they are uncompetitive is in line with previous years’ figures. “This suggests that more SMEs are sitting on the fence and view themselves as being neither competitive nor uncompetitive. Again, this is likely due to the current global uncertainty, with many organisations simply waiting to see exactly which way the economic wind blows,” Goldstuck explains.
Perhaps more encouraging is that many of those sitting on the fence still view themselves as profitable; almost three quarters of all surveyed reported that their businesses are in the green, with a quarter of these claiming to be strongly profitable. “The likely reason is that many that no longer consider themselves competitive are still making profits, albeit at a lower rate,” he says.
Goldstuck says that the contributions of the broader SME sector to the national economy should not be underestimated. As such, reduced overall competitiveness is a worrying finding, particularly against the backdrop of an under-fire economy in a country where rampant unemployment perpetuates economic inequality.
“The interim results indicate that there is indeed a correlation between being online and being successful. One might suggest that an online presence is becoming a necessary but not sufficient condition for doing business, given that more and more consumers than ever before are looking for their needs on the Internet,” Goldstuck concludes.
SME Survey is the original representative survey of small, medium and micro enterprises in South Africa. For more information, visit www.smesurvey.co.za
Contacts:
SME Survey spokesperson: Arthur Goldstuck (contact via e-mail arthur@worldwideworx.com )
SME Survey media support: Debbie Whittaker (083 273 5337)
SME Survey project manager: Kelly Conradie (contact via e-mail kellyc@coolcumba.com )
