Empowering SMEs: Navigating the Green and Digital Frontier for Sustainable Growth
On the 21st November, we took part in the discussion „Navigating the twin transition: Going green and digital“ organized by the OECD during the 2023 Green Growth & Sustainable Development Forum.
As the narrative of the session stated, the green digital transition creates both opportunities and challenges for small and medium enterprises (SMEs). Digitalisation can open-up new business opportunities by enabling low-carbon and circular business models, such as a sharing economy and online markets for second-hand or repaired products, and improving product life-cycle traceability. However, SMEs often face barriers to the adoption of green and digital technologies, such as lack of skills and access to finance. Furthermore, while the administrative burden of sustainability reporting requirements imposed on larger firms often trickle down supply chains to SMEs, digital technologies may help to automatise some of the reporting. During the session we discussed the role that digital technologies can play in driving a circular, low-carbon economy transition in SMEs, key challenges that hinder their adoption and possible policy solutions.
We also touched upon the activities of stakeholders association which can support SME sector, such as
raising awareness, access to information - as SMEs often fight to understand what the terms such as digitalization or twin transition is and could be in practice.
education - meaning organizing workshops, trainings, mentorhip and educating SME owners and employees about the importance of implementation of green digital technologies and its benefits
funding - Stakeholders coalitions can connect SMEs with green finance providers, or support them in accessing funding for gree digital investments. It can include providing information about available financing options, helping SMEs prepare applications, and advocating for policies that incentivize green investment.
In order to accelerate the green transition of SMEs, it is important to address the barriers that SMEs face in adopting digital technologies. These barriers include:
Lack of awareness and understanding: Many SMEs are not aware of the benefits of digital technologies for the green transition.
Lack of skills and expertise: SMEs may lack the skills and expertise needed to implement and use digital technologies.
Lack of access to funding: SMEs may not have access to the funding they need to invest in digital technologies.
Governments, policymakers, and other stakeholders can play a role in addressing these barriers by providing SMEs with access to information, training, and funding.
Governments and other stakeholders can provide businesses and consumers with information and education about the benefits of green technologies. This can help to raise awareness and understanding of green technologies, and reduce any barriers to adoption.
Last, but not least, companies may find it challenging to comply with evolving regulations related to both the digital and green transitions. Navigating and adhering to complex regulatory frameworks can pose a burden on businesses, especially those operating across multiple countries.
Cross-sectoral cooperation is considered key in the twin transition – addressing both the digital and green transitions simultaneously – for several reasons - it leverages the interconnections between digital and green challenges, maximizes synergies, encourages innovation, supports policy development, or creates economic opportunities.
