SMBA "Digital Economy Transition Inevitable for SMEs After COVID-19"

The street in Myeongdong, Seoul, was relatively quiet on the afternoon of the 23rd of last month. Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] As the spread of the novel coronavirus infection (COVID-19) is expected to prolong the global economic recession, it has been pointed out that the transition of small and medium-sized enterprises (SMEs) to the digital economy is inevitable.

The Small and Medium Business Institute stated this in the report "Directions for SME Response After COVID-19," published on the 7th, emphasizing the need for SMEs to improve their organizational structure for survival.

The report categorized the corporate management response directions for survival into financial deterioration response, management response, human resource management response, and crisis response capability building. It emphasized that for future advancement, responding to environmental uncertainties and securing leadership in innovation response are important.

To respond to financial deterioration, securing cash liquidity and expanding funding channels are the most important, and companies should recognize government policies as external factors, understand their impact on the business, and respond proactively. It also stressed that funding should be available for growth areas in human and technological aspects.

For stable management, establishing a contingency plan is the top priority, and short-term task priorities should be set and executed with clear objectives. In times of crisis, intuitive responses on-site and quick decision-making by leaders should cooperate, and a system enabling smooth communication must be established.

Additionally, managers should maintain and prepare for the present while predicting changes and new business models that the post-crisis situation will bring, from a long-term perspective.

For human resource management, continuous information sharing with members, ongoing monitoring of employees' health, and establishing safety systems such as telemedicine are necessary. At the same time, managers should prepare for the transition to untact by establishing digital work environments and data protection systems, and offline-centered companies should consider optimizing alternative options for supply and personnel in case of crisis.

To secure leadership in innovation response, it is pointed out that companies should seize opportunities amid the crisis to lay the foundation for growth, adapt to smart service environments by utilizing untact technologies, and diversify O2O supply networks and expand sales channels through servitization.

This content was produced with the assistance of AI translation services.