A survey by FGV Projetos in partnership with the Brazilian Industrial Development Agency (ABDI) about the digital maturity of micro and small enterprises reveals that two-third of them (66%) are at the two lowest levels of digital maturity. In all, 18% of these businesses were classified as “analog” and 48% as “emerging,” meaning that they are making efforts to digitalize but they still have traditional infrastructure and business models. Another 30% of these companies are considered “intermediate,” while just 4% are “digital leaders.”

The survey report shows that digital transformation practices and strategies are still poorly consolidated among micro and small enterprises. The crisis caused by the COVID-19 pandemic forced companies that were doing little in the digital world to adapt. However, this change did not necessarily speed up the digital maturity of companies, which were compelled to compete in another business arena without the tools required to do so. As well as being an indispensable requirement for companies’ survival and revenue generation, the increased digital maturity of micro and small enterprises – which account for 30% of Brazil’s GDP, more than 90% of its enterprises and more than 50% of its jobs – could improve the country’s productivity and competitiveness.

The average technological and digital development of micro and small enterprises is 40.77 points on a scale from 0 to 100, according to the survey. The service sector has the highest score, with an average of 43.73 points, followed by the industrial sector, with 40.49 points, and commerce, with 36.75 points. The average score of companies on the digital maturity scale was based on five objectives for which points were given: connect with and engage customers (average score of 44.41 points); create more value for customers (37.53 points); build a data-oriented organization (39.20 points); establish new bases for competition (35.01 points, the lowest average score, reflecting companies’ difficulty in adapting to the online world and in creating more innovative and digital business models); and innovate faster and more collaboratively (47.72 points, the highest score). The latter demonstrates that companies are opening up to new possibilities and adopting more agile and collaborative innovation practices.

According to 38% of companies, the biggest obstacle to digital transformation is a lack of resources. Another 14% of respondents said that their main difficulty lies in obtaining people or suppliers that can help them with digital transformation. Only 6% said that resistance to change among directors and managers is their main barrier. The survey also found that 68% of entrepreneurs are open to participating in digital maturity acceleration programs to transform their businesses.

The survey was based on 2,572 responses from Brazilian companies (65% microenterprises and the rest small) between March and May 2021. The sample was representative of the country and different sectors. There were 1,176 respondents in the services sector, 804 in the commerce sector and 537 in the industrial sector. All of them were in the private sector.

The complete study is available here.