Ibero-American experts in digitization and representatives of public and private institutions in Ibero-America yesterday analyzed the needs and future of digital transformation in Ibero-American SMEs, the difficulties and incorporation of digital technologies, the involvement of digitization in production processes and in new business models, especially in the current situation derived from COVID-19, among other issues. At the conference: "The transformation of Ibero-American SMEs in times of COVID-19", organized by the Ibero-American General Secretariat-SEGIB in collaboration with AGCID Chile, the Council of Ibero-American Entrepreneurs-CEIB and the Ibero-American Federation of Young Entrepreneurs-FIJE, the Iberoamerican general secretary, Rebeca Grynspan; the director of the International Cooperation Agency, Juan Pablo Lira Bianchi; the CEO of CEOE Internacional and permanent secretary of CEIB, Narciso Casado; the Secretary General for Industry and SMEs of the Government of Spain, Raúl Blanco; the Executive director of FINTECHILE, Ángel Sierra; the vice president of COPARMEX Youth in Mexico, Rocío Aguiar; the Undersecretary of Economy of the Government of Chile, Esteban Carrasco Zambrano, and the director of the CEOE Digital Transformation Commission, Julio Linares, among other personalities. The final conclusions of the meeting were delivered by the head of the Economy and Business of SEGIB, Pablo Adrián Hardy; and of the general secretary of FIJE, Antonio Magraner. The conference closed, moderated by the head of Entrepreneurship and SMEs, Esteban Campero, the Vice President of CEOE and President of CEPYME, Gerardo Cuerva.
The Forum also served to present the conclusions of a recent and exhaustive public policy report on this subject, prepared by SEGIB, through the Chilean Cooperation Fund, based on the experiences of countries such as Argentina, Chile, Colombia, Mexico, Portugal and Spain, and in response to two fundamental questions regarding the characteristics of public support initiatives and the work carried out by business organizations to promote digital transformation in SMEs.
The director of the International Cooperation Agency, Juan Pablo Lira Bianchi, highlighted that in November 2017 an agreement was signed between SEGIB, the Chilean Agency for International Cooperation and the South-South Fund for Ibero-America of the Chilean government, for a value of 800,000 euros, with an annual amount of 200,000 for four years. In this context, according to Lira, the possibility of doing a study on the digital transformation of SMEs arose. Due to the crisis, he pointed out, all the statistics fell apart, leading to a decline in the economies of 10 years in Latin America. Lira assured that before we imagined robots and technologies and, in recent times, especially as a result of the pandemic, an exponential acceleration of digitization has been triggered. "Communication between humans and machines has generated cyber-physical systems, which has given rise to the industrial revolution 4.0," he insisted. Therefore, SMEs in this context are faced with the challenge of adapting or dying, in order to face competition in the markets and not be digitally excluded. Faced with this situation, coordination between SMEs, the public sector, large companies, universities or research centers was launched in many countries to go further. Along these lines, in Ibero-America, this joint study was carried out to analyze public initiatives, taking into account that SMEs represent 99% of all companies in the Region and employ 67% of workers, despite the fact that their contribution to GDP remains low. "In Latin America, only 10% of SMEs export their production," he reported. Because of the crisis, he continued, the international context has been threatened and it only remains, as a more effective solution, to resort to collaboration with the different actors in society and establish spaces such as this forum, to exchange experiences, values and culture, for the sake of proposing ideas and solutions that allow the fastest and most effective way out of this crisis.
The CEO of International CEOE and permanent secretary of the Council of Ibero-American Entrepreneurs (CEIB), stressed that they are working in coordination with the International Organization of Employers (OIE) to come out together from this exceptional situation, which some have called the “crisis of the great isolation ”. To this end, response mechanisms have been activated, ranging from the adoption of economic measures to the implementation of solidarity and social initiatives. One of the main lessons that the crisis has left us has been the need to adopt measures that promote digitization in small and medium-sized companies and in public administrations. Likewise, the need to take care of our small and medium-sized companies was transferred to the authorities, since they represent most of the Ibero-American business fabric and are responsible for most of job creation. To this end, he pointed out, a regulatory framework that provides certainty must be established, the liquidity of SMEs must be supported and tax increases must be avoided that further penalize companies that normally do not have as many reserves as large ones.
"The best strategic reserves of a country, and which never run out of use, are its technologies and innovation and learning capabilities, let's take advantage of them" (CEOE Business Summit, Narciso Casado)
From the private sector and Latin American governments "we need to work together, promoting public-private collaboration, to guarantee access to the infrastructure necessary to implement digitization throughout our region," he stressed. In this sense, he also highlighted the joint work of CEIB, SEGIB and FIJE in the development of different activities in the last 3 months to make "more Region, more Ibero-America". In addition, he explained, the pandemic has accelerated the digital transformation of companies and workers exponentially and in record time, plunging us into a permanent master's degree, perhaps the largest in history, where we are all called to reorient ourselves towards technology. In this sense, he highlighted some of the programs and initiatives that CEIB member business organizations have launched in recent months, such as the approval of a plan to improve the financial possibilities of the productive sector of SMEs or the establishment of a Technical Commission that analyzes the operation of the PROPYME and FODEMIPYME Funds from the Costa Rican Union of Chambers and Associations of the Private Business sector in Costa Rica (UCCAEP). In turn, he reported, the National Association of Industrialists (ANDI) of Colombia also promoted the “Colombia Take Care Colombia” initiative, aimed at entrepreneurs and entrepreneurs to support economic revival and the Confederation of Industrial Chambers of the United Mexican States (CONCAMIN) approved the programs "Adapt your Business", "Go ahead with your Business" and "My Business Goes On". And finally, he mentioned the “InsPYraME UE” project, carried out by the Uruguayan Chamber of Commerce and Services and the Eurochamber, based on the European Union-MERCOSUR agreement, and which seeks to train Uruguayan companies throughout the country to that they can access in time and form the benefits that the signing of the agreement will entail. "The best strategic reserves of a country, and which are never depleted by its use, are its technologies and capacities for innovation and learning, let's take advantage of them," he insisted.
“In transitions, the old takes less time to die and the new takes less time to be born” (Rebeca Grynspan)
The Ibero-American Secretary General, Rebeca Grynspan, assured that there must be a new conversation between politics, business and society, multi-actor spaces must be promoted and revalue the public as collective transport and not only the state. Grynspan reported that when the study began, the Covid crisis erupted, and therefore "when we thought we had all the answers, we were changed all the questions." In this sense, he assured that the pandemic has accelerated digital transformation in 5 years and, since, in his opinion, the centuries do not start chronologically, this crisis has undoubtedly marked the true beginning of the 21st century. The Ibero-American Secretary General recalled a quote that says: "The problem with these transitions is that the old has not just died and the new has not just been born," but she considered that, in this context, the old takes less time to die and the new takes less time to be born. Therefore, it is crucial that, in these changing times, creation prevail over the destruction of the productive fabric. The Covid crisis has unleashed, in many ways, an earlier and different future, but the real challenge is to make that reality not only new but better.
More institutionality and sustainability in public policies
In this sense, Grynspan emphasized that the recovery process of the countries depends, to a large extent, on the survival capacity of the productive fabric. For this reason, the study carried out in 7 Ibero-American countries focused on three general lines: the characteristics of public initiatives in the area of digital transformation, what business organizations have contributed to in this area and what is the main challenge in this transformation process . To do this, the study was divided into three blocks consisting of the ideal institutional and strategic framework to bring about this change, the optimal instruments to promote transformation and what the environment for implementing these measures should be. Thus, the study represents a clearly defined roadmap from the start and, according to Grynspan, a strategy can only be successful if one understands that the short and long term start at the same time. On the other hand, he underlined the importance of involving the private sector in the design of public policies and emphasized the need for them to be lasting over time. Furthermore, it is crucial to concentrate efforts to preserve the greatest institutionality and sustainability possible, so that they are not simply government policies, but also state policies. "We have to be optimistic, have hope and trust and support the digital transformation in a firm and decisive way," he stressed.
Challenge and opportunities for the digital transformation of Latin American SMEs in the days of Covid-19
The head of Entrepreneurship and SMEs of SEGIB, Esteban Campero, served as moderator in this panel, in which he asked a series of questions to the speakers, the first of which focused on the operation of the Activa 4.0 Program. In this sense, the Secretary General for Industry and SMEs of the Spanish government, Raúl Blanco, pointed out that the promotion of Industry 4.0 is one of the priority lines of the Ministry of Industry, since SMEs have a very relevant role in this area, especially industrial ones. It is a very successful program, he commented, since the company allows him to diagnose his situation in the field of digitization, production processes and products, the relationship with his clients, in order to prepare the digitization plan and finally implement it. . The program is supplemented by lines of support for investment in digitization. In this sense, he assured that they have 50 million euros dedicated entirely to connected industry 4.0 and other lines that have emerged in parallel, such as the Activa Cybersecurity program, focused on giving SMEs more security, since 1,500 recognize being attacked in Spain, according to data from the Security Forces. Blanco explained that these initiatives are working very well, and common projects in the field of digitization that could be extrapolated to other countries could be launched.
Digitize your SME
Another of the questions asked by Esteban Campero revolved around the “Digitize your SME” program and its forecasts for the coming years. In this line, the undersecretary of Economy of the government of Chile, Esteban Carrasco, explained that, in the Ministry there are various initiatives related to digitization and have been unified since 2019 through the program "Digitize your SME", in response to this intuition to promote transformation. This initiative, he reported, focuses on three main ideas: the first is to convey to the community the need to understand what are the benefits and advantages of immersing yourself in the digital world; the second pillar is the task of understanding the environment, identifying the tools and acquiring them; and the third concept is the adoption and implementation of this strategy. According to Esteban Carrasco, in order to understand the importance of digital transformation, a tour was held in 2019 to launch seminars and workshops, aimed at spreading the importance of digitization in increasing sales of a business or for improving internal efficiency. Another very useful tool is the “digital check”, by which, through a platform, the company can assess its knowledge on the subject. Likewise, Carrasco said, digital training programs were implemented through programs where SMEs are offered a series of courses to learn basic aspects, such as finance, inventory management or sales. "SMEs online" is another program, he said, that teaches companies to create their web pages.
Impact of digital transformation on SMEs
Another issue that was addressed in the course of this panel was the impact that the digital transformation process has had on SMEs. Digitization has emerged as a constant in each seminar, indicated the director of the CEOE's Digital Transformation Commission, Julio Linares, and it is a totally unstoppable trend. One of the conclusions is that in 100 days we have advanced 5 years in digitization, clear examples of this have been teleworking, teleeducation, telemedicine or entertainment platforms. Linares also mentioned that companies have had to face various challenges, such as fraud; piracy; cyber attacks; privacy at risk; cybersecurity; and the greatest challenge of all, which has been the inequality of opportunities, since there are people who do not have the same access to technologies, equipment and skills. A large company, he added, has more possibilities than a small one that may lack processes, equipment, plans, talent, strategy or infrastructure. But we must not forget, he insisted, that the small also has great strengths to face digitization, such as agility, more flexibility and dynamism.
"The strongest do not survive, but those that best adapt to the environment, and the environment is digital" (Julio Linares)
Linares assured that digital technologies are very suitable for SMEs, since many tools do not need large investments, with little investment you can make use of very useful technology, even if it is basic. Small businesses need to be convinced that very low technologies can have a very positive impact on business productivity. This pandemic, he stressed, has to encourage and convince us that we all have to be digital, both individually and collectively. "The strongest do not survive, but those that best adapt to the environment, and the environment is digital," he concluded.
Opportunities at Next Borders
The president of COPARMEX Youth and founder of the Next Borders company, Rocío Aguiar, stated that, from her company, Next Borders, there was not only a gap in technological implementation, but also in general understanding. "We want Latin America to go to that digital frontier and leave the merely traditional and physical," he explained. The purpose of the Company is to implement technologies ecommerce so that Latin American companies are more competitive. In this sense, he insisted that there is a lot of talent and many products are made, but he has lacked knowing how to position them in a global market, and this is due to the lack of understanding of the economy. Before talking about digital transformation and ecommerce, he commented, it is necessary to speak of economy and, after digital economy. It is no use talking about them separately, he stressed, since today's reality is the digital economy. For this reason, he pointed out, we have to see digital transformation not as an isolated process from what we did before, but we have to understand that now the whole economy works differently, he argued. The main challenge in Latin America is to achieve a transformation of mind, because technologies will always be changing. The most important thing, he continued, is that business, government and academia understand the new economy in which we play, beyond Ibero-America. From the Next Borders Planning Service 4.0, he reported, it works from the understanding of what is happening in the world and the role that the company must play and how to transform itself.
Fintech companies and their impact on financial inclusion
Regarding the Fintech industry, the executive director of Fintech Chile explained that it is disaggregated throughout the banking chain. In important to understand, he insisted, that there are companies that finance SMEs, but in Chile about 400,000 small and medium-sized companies do not have a bank account today, and for this reason, the government has opted to support these companies with Covid loans. . Therefore, one of the tasks of the Government should be to enhance financing for non-bank credit. This year, Chile after Brazil, has managed to position itself as a recipient of funds for SMEs. Fintech companies are going to start gaining relevance and playing a crucial role. In Latin America there are already Fintech associations, where these companies are grouped and public-private alliances can be established. According to Sierra, there are currently 1,500 Fintech companies in the Region.
Cooperation distances for digital transformation and industry 4.0
The Secretary of State for Industry and SMEs, Raúl Blanco, also spoke during the panel on industrial relocation. In this sense, he stressed that all countries have suffered from closings of borders and also from value chains, production and international trade, which has meant that States have had to depend on their own capacities and public collaboration. -private. We all have complementary capabilities, he stressed, in healthcare and also in digitization, where we can collaborate in industrial value chains and common sectors such as food, culture and automotive, where all countries have reference assets and have with the help of the Secretary General of Ibero-American States, who represents an excellent exponent of this collaboration and of promoting common projects.
Role of digital transformation in this crisis
The undersecretary of Economy of Chile, Esteban Carrasco, emphasized that this health crisis has taught us many things, not only digital, but also the need to collaborate between people and to complement each other. In this sense, he explained that, in the economic world, it is also necessary to work together between the public and private sectors. During the crisis, he reported, most people have turned to shopping online, in fact, online sales have grown by 50%, while physical ones have decreased by between 20% and 30%. Carrasco also considered that the so-called “last mile” services should be improved and greater use should be made of teleworking platforms or financial services, since all this represents an opportunity as well as a challenge for development. Chile appears well positioned within the transformation, he indicated, but we should continue to contribute in relation to the digital education of people and companies; as well as supporting collaboration between the public sector, which can open the way and encourage culture, and the private sector, which can implement it with innovation.
CEOE 2025 Digital Plan
The president of the Digital Commission of CEOE, Julio Linares, emphasized the importance of the Digital 2025 Plan, a proposal by CEOE that was born from the conviction that the existence of a national plan for digitization would be a great contribution to advance more and better this sense, and positively impact productivity, competitiveness, economic growth and job creation. This plan should be coordinated jointly with political parties, unions and businessmen on vitally important issues, such as digital governance; fundamental pillars such as innovation, education and entrepreneurship; digitization of all public services of administrations; the acceleration of the transformation of the productive sectors; the digitization of citizens, from digital rights, trust and internet use; and sustainability, as digital technologies greatly influence and help sustainability.
The general secretary of the Iberoamerican Federation of Young Entrepreneurs (FIJE), Antonio Magraner, spoke of the “White Paper on Digital Transformation”, a joint project that began in November 2019 in collaboration with CEOE, SEGIB and large companies. The idea arose, because more than 90% of the ecosystem in Ibero-America are SMEs and MSMEs and, in most cases, their digital transformation was nil, either because the investment was very high, or because the transformation sounded like something very current, or simply because they considered it to be something more inherent in large multinationals. The objective of the White Paper, according to Magraner, focused on dismantling these three myths and being able to help them in their transition. In this sense, he assured that technology and digitization are compulsory subjects, that they are here to stay and that whoever does not do so is late. The FIJE general secretary insisted that the crisis has demonstrated the resilience of many companies and that, despite being difficult times, numerous opportunities have also emerged, especially for young people, through digital transformation.
The head of Economy and Business of the Ibero-American General Secretariat (SEGIB), Pablo Adrián Hardy, advanced the next steps planned by the institution for the coming months in terms of digitization. Along these lines, he highlighted the great progress made in this area during the crisis and assured that, if companies fail to digitize on time, they will no longer be able to compete in international markets. Regarding the next meetings, he reported the celebration of the IV Forum of the MSMEs in September in Brasilia; joint events between SEGIB, FIJE and the World Bank on investment in innovation; and the next Ibero-American Summit of Heads of State and Government, to be held in Andorra in November. He also reported the existence of a very powerful working group on innovation, which has the participation of large companies and which came to light after the last Summit in Guatemala.
The Vice President of CEOE and President of CEPYME, Gerardo Cuerva, congratulated the Chilean Cooperation Fund for the efforts they have made in the current context, when it comes to compiling all the public initiatives that have been commented on and that have allowed to know the measures that are being studied and implemented in countries such as Argentina, Brazil, Colombia, Spain, Mexico, Portugal and Chile itself. He also highlighted the great work of SEGIB, CEIB and FIJE, as well as the renewed impetus that they have given the Ibero-American region in recent months, through various activities, such as the work meeting "More Ibero-America, our company common ”chaired by SM the King of Spain, Felipe VI, with 23 presidents of the CEIB member business organizations; and the discussion held last week entitled "More Iberoamerica. Reflections of the future from politics, business and academia ”, in which 7 ex-Latin American presidents intervened and was closed by the current President of Argentina, Alberto Fernández.
According to Cuerva, the digital transformation of Ibero-American SMEs, in a situation like that of COVID-19, has highlighted the need to accelerate the digitization process, since "it is not a luxury but a necessity." The companies that were most digitized are the ones that have been most resilient. Digitization is a pending issue for Spanish SMEs, for this reason, he added, it has to be among one of the priorities of our governments. To achieve this goal and transformation, he continued, it is essential to support our companies without generating more taxes, without increasing the tax burden, without higher costs or bureaucratic burdens and creating an attractive legal framework, which includes legal certainty. It is essential to fight uncertainty and fear. These measures, he stressed, are necessary to guarantee the competitiveness of our companies abroad. Business digitization must be accompanied by that of the public Administration, thus streamlining customs and import procedures through digitization, and promoting tools that promote internationalization through digital channels. "By promoting digitalisation among our companies, we will enhance productivity and competitiveness throughout Ibero-America, making the Region a more prosperous and inclusive place," he concluded.