The digital transformation of micro and small businesses still nascent in Brazil

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Brazilian micro and small businesses are mostly in the early stages of digital transformation, new research shows, but these businesses are increasingly open to technological innovation.

Using a 4-level scale, where 1 is an organization that operates analogically, 2 is considered ’emerging’ in terms of adoption, 3 is at an intermediate level of digitization and 4 is a digital leader , the Brazilian Survey of Micro and Small Enterprises digitization map was conducted by the Brazilian Agency for Industrial Development (ABDI) and the Getúlio Vargas Foundation (FGV) with 2,572 companies nationwide.

According to the study, 66% of companies in the segment are in the first two stages of digital maturity, while 30% are in the middle stage (level 3), and only 3% can be considered digital leaders.

In addition, the degree of implementation of 25 good practices in the digital space and the use of enabling technologies were measured as part of the study. According to the research, the average digital maturity of Brazilian micro and small businesses is 40.77 points, on a scale of 0 to 100 points, where 0 is a company that is not digital at all, 100 being fully digital.

The survey also found that broadband access is a reality for 68.7% of businesses. However, only 27.5% of organizations surveyed have a website with interactive features, while 25.4% use cloud computing services and only 19% collect or store data from their customers.

Distance learning as a way to improve workforce skills was a method used by only 17.7% of organizations surveyed, while cybersecurity tools were in place in only 21.4% of the companies surveyed. A separate study conducted by Marsh on behalf of Microsoft found that 84% of companies in Brazil have failed to increase their investments in cybersecurity in recent months despite an increase in incidents following the Covid pandemic -19.

Regarding rapid and collaborative innovation, 43.7% of companies surveyed in the ABDI / FGV study are open to opinions and suggestions for product or service development, but only 11.6% are committed with other companies and their customers in such processes.

When it comes to why Brazilian micro and small businesses are struggling with digital transformation, almost 40% of those surveyed said that the main difficulty with digital transformation is the lack of financial resources to invest. The lack of strategy and knowledge on how to digitize their business was cited by 25% of entrepreneurs as the main obstacle in the process. On the other hand, 68% of those surveyed said they were ready to participate in some sort of digital maturity acceleration program.

Beyond the challenges identified in the report, the results highlight the opportunities for the adoption of digital approaches in micro and small organizations in Brazil, as they represent more than half of the job openings in Brazil, according to the report. President of ABDI, Igor Calvet.

“It is essential that companies adapt and make the most of the benefits of these technologies, which help improve their operations, create new business models and generate more revenue,” noted the leader.


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