New Digital Innovations Striking Impact on Small Business   

The digital world is here to stay. It already affects almost every aspect of our lives, and that’s only going to increase as “The Internet of Things” — the joined-up world in which a wide range of machinery communicates digitally — and “Generation C” — the “Connected” generation, those born after 1990 who’ve never known a non-digital world — gradually become dominant.  (For more insight into this comprehensive societal switch, see this article,  and detailed research by the University of Durham.)

There’s no doubt that the digital changes of the last two decades have benefited consumers, who now have everything from information to music at their fingertips, but the advantage for suppliers hasn’t been quite so obvious.

However, digitalization does offer plenty of opportunities to both large and small businesses, if used properly. According to the World Economic Forum’s Global Information Technology Report 2013, “Digitization has boosted world economic output by $193 billion over the past two years, and created 6 million jobs during that period.”  

The Difference Digitalization Makes

A look at the many conveniences that online commerce offers:

• • Worldwide Access: The most obvious, impressive perk is a global reach: any business that sells good online is clearly not restricted by national borders, and your website becomes your shop window that can be accessed from anywhere in the world and easily updated.
  • Compared with a TV commercial, a video on YouTube is cheap to make and show, and isn’t restricted to specific time-slots.
  • Email shots, compared with traditional mail-shots, are not only far cheaper to produce and send out, but can be targeted more specifically.
  • Social media such as Facebook and Twitter enable you to get company and product news out when you need it, instead of having to rely newspapers and magazines, whose print schedules might not fit with your own, and who always charge for the service in any case.
  • Cloud computing means you carry your office with you, which can cut down on overheads.
  • Worldwide Access, v. 2: Options to trade globally are going to increase once 3D printing becomes generally available. (Though this might seem at present like something out of Star Trek, it’s likely that within the next decade or two we’ll be emailing even physical goods to customers.)

The Cyber Advantage for Small Businesses

Traditionally, small businesses were at a disadvantage in terms of marketing reach, since they couldn’t access the huge marketing budgets available to large multinationals. Digitalization is changing all that, though, and it’s possible to reach a global audience with a minimal budget.

Success can be optimized by adopting a smart, focused strategy:

• • Prioritize. There’s a huge number of possible outlets for getting the word out about your product, and a small start-up can be tempted to use them all.  Instead, decide what you need from your marketing strategy and which outlets will serve you best.
  • Get your SEO right. A well-optimized website can virtually sell itself, but the needs are changing all the time, so it must be an ongoing process. And avoid the traditional “black hat” strategies – Google is wise to them, and using them will actually hurt your rankings.
  • Listen, research and know your audience. This is especially important when dealing with a variety of cultures, where what appeals to one could be offensive to another. All campaigns should be tailored to what will work best within the specific target audience.
  • Make your content shareable. The greatest strength of social media is how content can be passed on by your contacts, and then by their contacts. Don’t just advertise; make sure you post things that people will find interesting enough to pass on.
  • You don’t have to do it all yourself. It’s important to decide whether you can manage the workload yourself, or if it’s going to cut into time you need for making money. It may be cost-effective in the long run to hire a digital marketing company to run your campaign.

Digital Progress, Around the Globe

Digitalization offers not only a choice of products from around the world, but also its workforce. This is important, because Europe currently has a shortage of skilled IT personnel, whereas these skills are readily available elsewhere, often among non-traditional population sectors. In both Brazil and the UAE, for instance, women far outstrip men as university graduates and are available on the global job market.

This will impact small and medium companies in two ways. For one thing, it offers a huge opening for companies who offer the IT skills needed to create this new world. That’s especially true in Europe which, despite being a vast market, currently imports most of its IT workforce from the US.

The one notably advanced European country in this area is Germany, which has taken to digitalization better than most of the continent, and where both the government and major companies such as Siemens are behind it.  The results have generated €145 billion in 2012, while also creating large numbers of new jobs. 

Do Traditional Outlets Still Have a Place?

One of the problems that still exists in this new frontier is that many traditional industries have been slow to adapt and find out what digitalization has to offer.  The music sector was one of the first to jump into the digital world, through partnerships with companies like Apple and Spotify, but a good deal of industry in Europe and North America has been more cautious, and is consequently suffering.

This doesn’t mean that traditional solutions should be abandoned wholesale, however. Targeted TV commercials, for instance, can still be effective as part of a campaign; magazines and newspapers are far from spent forces, especially since many are themselves embracing digital outlets; and, of course, cloud computing doesn’t mean that you necessarily want to dispense with a physical office.

How you assess this, and the balance you choose, will depend largely on the kind of business you run. An online service, such as a web designer, may be able to be virtually 100% digital. On the other hand, a company offering physical items, such as a used car dealership, will still need to advertise in trade and local media as well as online. In these cases, digital solutions offer extra, broader options — they’re not simply a one-for-one replacement.

Industry 4.0

But for now, “The Internet of Things” is  on its way to creating Industry 4.0, a new industrial revolution based on the cyber-tization and digital integration of industry. The powerhouse of Industry 4.0 is in Germany; in other countries, the idea goes by various names such as “integrated industry,” “smart factories” and “future factories.”

This is going to become the standard way of doing business – and, most excitingly, will for the first time enable a small business to operate on the same global terms as a multinational. Any company that ignores the changes is going to be left behind, but those that take advantage now can be ahead of the crowd.