As the world begins to emerge from the shadow of COVID-19, it is time to take stock of how the pandemic has changed the very fabric of our society. While it is an indisputable truth that there are some things that have been changed forever, not all of the changes we have seen over the past year have been new or unexpected. COVID-19 has in fact accelerated processes and trends that were already beginning to grow. Chief among these is digitalization. 

Needless to say, the internet was already ubiquitous before the pandemic struck. But as a result of the circumstances imposed by the pandemic—lockdowns, social distancing, working from home—its use has become more widespread than ever. Companies, consumers, and workers were forced to expand their use of the internet to adapt their business practices, consumption habits, and workday routines to the COVID-19 era. Even those who had been resistant to digitalization in the past had no choice but to adapt. Videoconferences, online shopping and remote learning became commonplace as digitalization swept through every aspect of our lives. 

Both consumers and companies have turned towards technology and digitalization more than ever. A survey conducted by McKinsey and Company shows that globally, the average share of online customer interactions has accelerated by 3 years. Companies in turn have accelerated the partial or full digitalization of their products and services by 7 years. Several of the changes brought about by the pandemic are also likely to stick in the long run, including an increase in consumer demand for online services. 

Digitalization has proved an invaluable tool for companies during COVID-19. This is especially so for small and medium enterprises, or SMEs. Many companies have turned to digital tools in order to adapt to the realities of operating during a pandemic, with early figures from the OECD suggesting that up to 70% of SMEs worldwide have increased their use of digital tools. Food delivery platforms such as GrubHub and UberEats proved vital for restaurants to continue operating during lockdowns where dining in was banned. Tools like online calendar scheduling help businesses comply with local occupancy limits and social distancing while enabling them to continue providing their services smoothly. E-commerce platforms allowed small stores to easily take their stores online. 

However, not all SMEs were able to adapt their businesses with such ease. The digital divide, a trend that existed long before COVID-19, was deepened as SMEs with inadequate access to the internet and owners with limited computer literacy struggled to adjust to a world where everything was online. SMEs, especially those in developing countries, have lagged behind in the adoption of digital tools. The ability to digitalize requires several factors that we might take for granted, such as access to the internet through broadband or wireless networks, computer literacy, and knowledge of the tools available.

What can be done to help these SMEs digitalize? Government support is crucial in making SMEs digital-ready. A report by the UN Conference on Trade and Development highlights several ways governments can help SMEs with their digitalization efforts. 

First, governments should think strategically about what is needed for SMEs to effectively digitalize, and plan their policies around these considerations. Governments should also take into account the realities of the situation on the ground, and ensure that their interventions target specific areas to increase effectiveness. 

Second, the development of internet infrastructure is critical. Without easy access to the internet, SMEs will not even be able to move their businesses online, let alone adapt their business model through the use of digital tools. Such infrastructure should also be cheaply accessible so that it is affordable to SMEs to use. 

Third, developing digital skills in SME owners and employees is important to make sure that SMEs are able to make full use of the wide range of digitalization options that are available. Government investment in increasing computer literacy will be key to ensure that the next generation of business owners is able to build digital-ready businesses which will be able to weather the next pandemic, whenever it comes. 

Digitalization efforts go beyond simply making sure companies are able to cope with large scale disruptions to their normal business environments. Digitalization lowers the barriers of entry to many potential entrepreneurs who wish to build their own companies. It allows companies to expand their client base and consumer pool beyond their geographical vicinity. SMEs can use digital tools to increase efficiency and improve their profit margins. In a world that is now more online than ever, it is crucial for governments to step in and ensure that SMEs are well equipped with the knowledge and tools needed to ensure that they can thrive in a post-pandemic world in which the internet is not just a tool, but is a way of life.