A study found that 58 percent of surveyed SMEs said they preferred to invest in technology rather than traditional areas such as factories or machinery to exploit growth opportunities in the digital economy.
The ASEAN SME Transformation Survey polled 1,200 SMEs from six core ASEAN countries of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam late last year, with results aggregating the responses of entrepreneurs from about 200 SMEs in each country.
Of the surveyed SMEs in Vietnam, 71 percent said they planned to invest in software like mobile applications or digital marketing. Hardware and infrastructure investments ranked second, at 64 percent.
Most of the businesses surveyed (86 percent) saw technology as the preferred means of improving cost management, compared to other methods such as cutting overheads (81 percent) or finding cheaper suppliers (78 percent).
Businesses also turned to technological solutions to simplify their banking requirements. 78 percent of SMEs indicated that they would choose to access financial products or services, such as loan applications, online.
“The fact that more businesses are placing urgency on IT rather than conventional fixed asset spending is very encouraging, although SMEs need to ensure that they fully grasp and understand the digital options of the market to make the best use of this resource.” said Harry Loh, Chief Executive Officer of UOB Vietnam.
The SMEs said they are moving towards prioritising investments in technology to maintain growth.
The survey found that around 67 percent of SMEs in the country expect to see continued increases in revenue in 2018, in the context of high economic growth.
In a recent report titled “SMEs: Are you transforming for the future?” released by the United Overseas Bank (UOB), EY and Dun & Bradstreet, 34 percent of respondents predicted double digit growth this year.
Nguyen Viet Thang, CEO of Crif D&B Vietnam, noted that the predictions given by businesses were made in the context of high economic growth in the first nine months of the year. According to the General Statistics Office of Vietnam, the economy grew by 6.98 percent in the first 9 months compared to the same period last year, the highest growth rate since 2011.
“In the last quarter of this year, Vietnamese SMEs are expected to maintain a good level of growth, with 52.5 percent of processing and manufacturing firms believing conditions will continue to improve”, Thang added.
The study has deemed SMEs as those firms with annual revenues of between $1-20 million. Vietnamese businesses of this size currently face many challenges including global trade tensions, talent shortages, and high labour costs.
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