The economy is the capacity of a nation to keep money in rotation via investments, retail, produce and manufacturing, and is the determining factor of its regional and global viability.
SMALL & MEDIUM ENTERPRISES
The economy is the capacity of a nation to keep money in rotation via investments, retail, produce and manufacturing, and is the determining factor of its regional and global viability.
Small and medium-sized enterprises (SMEs) have always been the quiet force behind vibrant economies. Whether it is the textile mills of Faisalabad or family-run logistics firms in Nairobi, precision manufacturers in Vietnam or karyana chains in India, SMEs have always generated mass employment and nurtured entrepreneurial energy while effectively fueling exports.
Now, however, the role of local businesses is being rewritten, as digital transformation is turning them into globally competitive players, enabling speed, intelligence and confidence once reserved only for large multinationals.
This democratisation of intelligence enables a mid-sized textile exporter in Pakistan to forecast international demand using predictive algorithms, manage inventory across multiple production units in real time and respond to customer needs with the same sophistication. Technology has thus become a powerful equaliser.
The World Economic Forum (WEF) has identified digital infrastructure as a significant driver of long-term financial growth and adaptive capacity for SMEs. In a report, the WEF maintains that staying up to date with these trends is crucial for SMEs to remain competitive in the evolving digital landscape. While this may involve a high upfront cost, in the medium to long term, investments in digitisation can enable SMEs to gain valuable insights from their data, increase the efficiency of their operations, achieve cost savings, improve competitiveness and create greater opportunities for scalability and growth.
While the wish list is huge, and we need this Fourth Industrial Revolution to take the entire country by storm, we do see the technology and partner ecosystem coming up rather strongly in Pakistan. Implementations driven by platforms like SAP are changing the game overnight for mid-tier groups. Having recently migrated to modern cloud ERP platforms, SMEs are now running unified planning, production, and sales forecasting across their businesses. The result is an efficient, fundamentally more resilient and competitive business with shorter delivery cycles and better working capital management that strengthens international buyer confidence.
Digital transformation for SMEs typically begins with a desire for greater efficiency, such as improved financial control and reduced paperwork. The real inflexion point arrives when businesses shift from digitising processes to transforming intelligence
Recent studies show that the adoption of cloud technologies among small and mid-sized enterprises is strongly linked to improved competitive outcomes. For instance, a study in the US found that businesses using cloud computing were significantly more likely to export goods or services compared with non-users.
Globally, a systematic review of 90 studies on cloud adoption in SMEs found that approximately 82 per cent reported gains in operational efficiency, 76 per cent noted cost savings, and 64 per cent reported stronger competitive advantage as a key outcome. Modern cloud-based tools enable smaller enterprises to punch above their weight and participate more fully in global trade.
Digital transformation for SMEs typically begins with a desire for greater efficiency, such as improved financial control and reduced paperwork. The real inflexion point arrives when businesses shift from digitising processes to transforming intelligence. When data stops being a by-product and becomes a strategic asset, SMEs evolve into organisations capable of predicting demand, optimising costs, and responding to customers with precision. With AI-enabled ERP systems, Pakistani SMEs are moving from reactive to proactive, from instinct-driven decisions to evidence-based strategy.
Technology alone, however, is not enough. What determines whether SMEs can adopt and scale digital innovation is the ecosystem around them, which includes a mix of affordability, skills enablement, financing, policy support and local advisory expertise. This is where the partner-led model plays a defining role. In Pakistan and across emerging markets, digital transformation partners bring deep understanding of local business realities and sector challenges, from textiles and agriculture to pharmaceuticals and logistics.
Yet barriers remain. Many SMEs still perceive enterprise-grade technology as costly or complex. Access to finance is uneven and digital skills need strengthening. But these challenges are solvable. When banks offer SME-focused digital credit, governments incentivise tech adoption and industry bodies drive awareness, the adoption curve steepens. These coordinated efforts can turn early wins into sustained transformation. Once businesses see early wins, transformation becomes self-reinforcing.
Pakistan is a nation on the cusp of demographic transformation, expected to cross 400 million people in the coming decades. The question is not whether SMEs should lead economic growth, but how fast we can equip them to do so.
Technology is still the fastest, most inclusive, and most scalable route to standardise and professionalise processes from day one. Cloud-based platforms and embedded AI level the playing field, while partner-led digital ecosystems ensure local businesses receive training, guidance and post-deployment enablement.
With targeted state policies such as tax incentives and export-digitisation schemes, the pace of adoption can be enhanced and the right solutions can help SMEs move from struggling locally to leading regionally in no time.
The idea is to become a participant in global value chains and reposition our assets -- including skills, products and ideas -- to define today and plan for tomorrow.
The writer is the head of Partner-Led Territory at SAP Pakistan. She can be reached at: [email protected]
