Digital technology and the micro-entrepreneur

Without fail, in every major meeting and business gathering I have attended lately, the subject of digital technology always came up. Often, it is the focal point of the event, such as the recent Digital Financial Inclusion Awards, at the meeting with the ASEAN Secretariat led by Sec. Gen. HE Dr. Kao Kim Hourn, at the SM Job Fair + Skills e-Hub Holiday Career Fest and at our Go Negosyo BalikBayan Summit.

My area of concern when it comes to the discussion of digital technology focuses mainly on two things: MSMEs and the workforce, specifically, digital technology’s impact on them.

Digital technology will be at the forefront of top-level discussions next year. This is because next year, during the Philippines’ chairship of ASEAN, artificial intelligence (AI) and the expected conclusion of the ASEAN Digital Economy Framework Agreement (DEFA) will be among the top issues seen to dominate discussions. The DEFA aims to accelerate ASEAN’s digital transformation, further boosting the region’s goal of regional economic integration. What I noticed lately, though, is that more and more, AI has come to the top of the agenda.

The expressed commitment to driving ASEAN’s transition into a digitally empowered community brings hope to forward-thinking MSMEs. Digital technology presents an extraordinary opportunity for them. AI can streamline customs and logistics across ASEAN borders, dramatically reducing the time and cost for our small exporters and importers. It can empower small businesses to compete effectively in a global marketplace. Digital platforms, e-commerce options and cloud services are increasingly accessible, helping businesses that have traditionally found it hard to compete. AI offers crucial insights into customer behavior and preferences – information that has the power to enhance operations, develop innovative products and improve services.

If this could be made possible, it would give MSMEs market access on an unprecedented scale. That is, if they are equipped with the digital tools and the know-how on their applications for their operations. In short, digital readiness and capacity-building are critical to realizing the benefits of this push to digital transformation.

Already, there are many MSMEs who are embracing the use of digital payments and social media marketing. These MSMEs have shown that they have the proficiency and willingness to adapt. The focus on the safe, ethical, responsible, equitable and sustainable adoption of technology, AI in particular, can address the many issues of digital transformation that are about to face this sector.

Regarding its impact on labor, AI can be utilized to support tasks rather than replace the workforce. Technology can enhance employees’ abilities, providing solutions that boost the business in ways previously unimaginable. I mention this because it’s tempting to replace people with machines, which I believe is unwise when considering the potential economic effects down the line. Without income, people will not only lack the money to spend in the economy but will also have no capital to start their own businesses. The long-term consequences for an economy like ours are concerning, especially since MSMEs constitute a large part of the supply and service chain for our major corporations and generate more than 66 percent of the jobs in this country. The smarter approach is to upskill the workforce so they can earn better wages, become more competitive globally and have the capital to start small businesses.

When we embed this kind of sustainability into digital transformation, we ensure that our MSMEs and the workforce are resilient in the face of economic challenges and are equipped to meet evolving global demands. This is a long-term commitment to sustainability. It is a better use of innovation, not just for efficiency or for the bragging rights of being the first on our block to use AI in our operations, but for ensuring that big business continues to contribute positively to society and is not tempted to merely look after its own profits.

Imagine how a tech-savvy, adaptable workforce can bring innovation and competitiveness to small businesses. Imagine a future where our young people are equipped with the skills necessary to drive companies forward. Championing youth empowerment cultivates the next generation of entrepreneurs and innovators within our sector. These young visionaries, armed with digital fluency and creativity, can eventually inject vital energy and fresh perspectives and push the boundaries of what our MSMEs can achieve.

For example, the application of technology to sectors like agriculture can vastly increase our competitiveness by allowing us to optimize the use of our lands and deftly maneuver through changing weather patterns. In the face of food insecurity, this, I think, will be crucial.

AI can also find an inclusive approach that acknowledges the diverse demographics within our communities, not just within the country but in the whole of ASEAN. Diverse and thriving communities create stable markets and supportive environments where MSMEs can flourish. Imagine also how decentralized economic activity beyond traditional economic centers can bring not just national but also regional engagement closer to the MSMEs in the provinces. It is inclusivity and participation at all levels, allowing more voices, more products and more potential to be shared.

We should embrace the digital shift by helping our people confidently explore and adopt the digital tools now available to them. We should make the most of this opportunity to engage in the broader process, utilizing platforms like the ASEAN to participate in dialogue and voice our collective needs. Upskilling of our workforce while thinking regionally will enable us to seize emerging opportunities in an interconnected ASEAN market.

Digital technology beckons us to participate actively in this transformative journey. For the Filipino workforce and MSME sector – the heart of our economic resilience – the coming years could bring a chance to truly lead the charge toward a more inclusive and prosperous future for all.

Source: Go Negosyo - www.philstar.com