Realizing the Potential of Digitization for Small Businesses

Digitization is transforming commerce, and the COVID pandemic has accelerated this trend. Small firms are critical to employment in virtually every nation, particularly in emerging economies. Technology and digitization have the potential to increase the productivity of small firms by providing them with access to information and markets, increasing access to financial services, and helping them to formalize. But small firms also face greater barriers than large firms in using technology, which can make it even more challenging for them to compete. While the pandemic accelerated the use of technology by and in support of small firms, it was the smallest firms and those owned by women, racial and ethnic minorities that were least likely to use or be reached by digital tools and services. What needs to happen from a policy, practice and product perspective to enable the small firm sector to realize the potential of digitization for all small firms?