Digital Connectivity in MSMEs in the Lancang-Mekong Countries

Researcher:
- Associate Prof. Dr. Janya Chanchaichujit – Prince of Songkla University, Thailand
- Dr. Sreejith Balasubramanian – Middlesex University, Dubai, United Arab Emirates
Funded by: Mekong Institute (Lancang Mekong Corporation Fund)
Duration: January -May 2022
Status : Completed
Abstract:
Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities (Gartner, 2022). It holds enormous potential to support growth, promote innovation and facilitate connectivity. COVID-19 has acted as a catalyst for digital transformation. Digital connectivity has proven to be a crucial factor, allowing economies to successfully contain the spread of the virus and enabling business continuity across the globe, saving millions of jobs. For instance, digital cash transactions through mobile phone platforms have reduced the risk of COVID-19 spread associated with physical cash transactions.
Studies have shown that technology adoption has enhanced the competitiveness of Micro, Small, and Medium-sized Enterprises (MSMEs) (UNCTAD, 2020). As diverse as they are, emerging digital technologies offer MSMEs a range of applications and solutions to improve performance and overcome the size-related limitations they face in doing business compared to large firms. Digital tools such as e-commerce platforms, resource management, and collaboration software have helped small companies and start-ups leverage their networks and employees (The Network Readiness Index, 2021).
Despite potentially significant benefits, MSMEs still lag in digitalization (OECD, 2021). Since over 95% of all firms in many countries and regions are MSMEs, their digitalization is critical for innovation, economic growth, and job creation. It plays a crucial role in creating sustainable societies (OECD, 2021). MSMEs’ failure to adapt to technological changes may further entrench digital inequalities vis-à-vis large firms. Enabling MSME digitalization has become a top policy priority for most countries because the MSME digital gap has increased inequalities among people, places, and firms. There are concerns that the benefits of the digital transformation could accrue to large firms broadening these inequalities.
To foster digitalization and adoption of innovative technologies in MSMEs, Mekong Institute (MI), with the support of the People’s Government of the People’s Republic of China, is implementing the project on “Fostering Digital Connectivity in the Lancang-Mekong Countries.” The project seeks to identify challenges and opportunities in digital connectivity in the MSMEs sector and enhance the key stakeholders’ capacity to adopt digital platforms and technologies, contributing to enhanced digital connectivity among LMC member countries.
This study looks at the status of MSMEs’ digital uptake, including in the context of the COVID-19 crisis in Lancang-Mekong countries. This research aims to be an evidence-based study to understand the current status, issues, challenges, and opportunities of digital connectivity for MSMEs in LMC. The specific objectives of this study are as follows:
- Examine the current status of the adoption of digital technology by MSMEs in the Lancang-Mekong countries
- Identify the primary enablers and benefits of digital technology adoption for MSMEs in the Lancang-Mekong countries
- Examine the main challenges and barriers facing MSMEs for digital technology adoption in the Lancang-Mekong countries
- Provide recommendations for future actions that will enhance the digitalization and digital connectivity of MSMEs in the Lancang-Mekong countries
For further information about the project, please contact Associate Prof. Dr. Janya Chanchaichujit.