Harnessing Digital Technologies to Promote SMEs in the MENAP Region

IMF Working Papers, July 24, 2020

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Policy makers in the MENAP region have been formulating policies and designing programs to develop small and medium sized enterprises (SMEs) with a view to create jobs and achieve inclusive growth.
Programs have helped increase the number of enterprises, but growth of SMEs continues to face barriers to growth.
As a result, microenterprises predominate and SMEs contribution to employment remains below potential.
Partial implementation of reforms explains some of the underperformance, but frictions in strategy design also played an important role.
Sustaining current reforms is not sufficient to achieve inclusive growth.
Digital technologies have potential to boost SMEs productivity and growth and economies are rapidly digitalizing, thus SMEs need to embrace digital solutions to compete and survive.
For SMEs to be effective engines of inclusive growth, a rethinking of the SME development strategy is needed that makes SMEs’ digital transformation a priority.

Reprioritize SME development strategies to make SMEs’ digital transformation a central objective.
Address frictions in strategy design in addition to completing partial implementation of existing reforms.
Promote adoption of digital technologies among SMEs to enhance productivity, competitiveness, and survival as economies rapidly digitalize.

Subjects: Business environment, Digitalization, Economic sectors, Employment, Labor, Small and medium enterprises, Technology
Keywords: Business environment, digital economy, Digital Technologies, Digitalization, Employment, financing SMEs, Global, government service, Inclusive Growth, MENAP country, MENAP Region, Middle East, North Africa, private equity, Small and medium enterprises, SME data, SME growth, SME lending, SME policy, SME sector, SME strategy, SME support policy, SMEs in MENAP, Sub-Saharan Africa, WP

IMF Working Paper: "Harnessing Digital Technologies to Promote SMEs in the MENAP Region", Working Paper No. 2020/135, July 24, 2020.