SMEs' Digital Maturity Scores 41 out of 100... 66% "No Preparedness Strategy"

Korea Federation of SMEs Announces 'SME Digital Maturity Survey'
Only 16.7% of SMEs Preparing for Digital Transformation
Domestic Companies Lag Behind Exporters in Digitalization Pace

A small to medium-sized manufacturing factory located in Gimpo, Gyeonggi.
Photo by Lee Junhyung

[Asia Economy Reporter Junhyung Lee] The digital maturity of domestic small and medium-sized enterprises (SMEs) was found to be only 41 points out of 100. It was also revealed that 66% of SMEs do not have a strategy to prepare for digitalization.

The Korea Federation of SMEs announced on the 14th that, based on a 'Digital Maturity Survey of SMEs' conducted from the 13th to the 15th of last month targeting 414 SMEs, the digital maturity of domestic SMEs, converted to a 100-point scale, was only 41.4 points.

By industry, manufacturing scored 42.5 points, which was 4 points higher than non-manufacturing (38.5 points). Among manufacturing companies, exporters (43.3 points) scored higher than domestic market companies (39.4 points). In non-manufacturing as well, exporters' digital maturity (44.1 points) was higher than that of domestic companies (37.4 points). Overall, the Korea Federation of SMEs explained that digital maturity is proportional to export competitiveness.

Less than 2 out of 10 SMEs (16.7%) are preparing for digitalization. 65.5% of SMEs were found not to be preparing a digitalization strategy. In particular, 20.6% of exporters were preparing digitalization strategies, while only 10.5% of domestic companies were doing so. This indicates that domestic companies are slower in preparing for digitalization compared to exporters.

Additionally, digital maturity showed significant differences depending on export volume and sales size. The digital maturity of manufacturing companies with exports exceeding 3 billion KRW was 49.6 points, which was 12.2 points higher than manufacturing companies with less than 1 billion KRW in exports (37.4 points). Manufacturing companies with sales exceeding 10 billion KRW also scored 50.8 points, 12.2 points higher than companies with less than 3 billion KRW in sales (38.6 points). In non-manufacturing, companies with sales over 10 billion KRW (45.3 points) scored higher than those with less than 3 billion KRW (37.4 points).

More than half of SMEs (52.4%) cited 'in-house workforce training' as necessary to prepare for digital transformation. This was followed by 'connection with online platforms (30.9%)', 'corporate culture change (29.5%)', and 'expert consulting (23.7%)'.

Choo Moon-gap, head of the Economic Policy Division at the Korea Federation of SMEs, said, "Digital transformation is an unavoidable global trend, but only 16.7% of domestic SMEs have established related strategies to respond," adding, "It is necessary to support SMEs in securing professional personnel and developing business models so they do not lose global competitiveness."

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