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New research from the International Trade Centre shows digitally advanced small businesses are nearly five times more likely to grow sales than their less digitally advanced counterparts and outlines key actions that businesses and policymakers can take for an inclusive digital transformation.
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(Geneva/Johannesburg) – Small businesses using digital technologies report major performance gains, with over 80% of those using digital tools seeing increased sales and reduced costs, according to new research by the International Trade Centre (ITC).
The most advanced users of digital tools – called “expert users” – see the greatest gains: They are nearly 5 times more likely to increase sales and 12 times more likely to reduce costs than less digitally advanced firms, according to the ITC flagship report, SME Competitiveness Outlook 2025: A Digital Transformation Roadmap. Businesses that are expert users of digital tools are also twice as likely to innovate or improve product and service quality.
Despite the benefits of integrating digital tools into their business, many small firms are unable to do so. Without urgent support, they risk being left behind, widening the divide between businesses of developing and developed countries, and deepening inequalities within countries, between small and large, women-led and men-led, and youth and non-youth-led companies, making it more difficult to tackle environmental, social and economic challenges.
Environment matters – and so does business size
Released on 23 July during the first-ever Global SME Ministerial Meeting in Johannesburg, the report draws on survey data from about 7,400 firms in 78 countries to highlight data, trends and recommendations for policymakers and businesses. It also introduces the new Enterprise Digital Transformation Index that assesses firm-level digital maturity and helps identify where support is most needed.
The extent to which firms are able to go digital depends heavily on their surrounding environment. The report finds that in digitally ready economies, nearly 60% of firms are expert users of digital tools – triple the rate than in less prepared countries. Digital readiness means access to infrastructure, skills and supportive regulation. Without these enablers, small firms often struggle to keep up.
In less supportive settings, large firms are 2.5 times more likely to be expert users than small ones. Male-led businesses are 1.5 times more likely than female-led ones to be expert users, while youth-led firms trail behind. These disparities reveal how firm size and ownership matters – especially when the digital environment is weak – and how businesses that are smaller or led by women and youth require tailored support.
These gaps narrow significantly in economies with strong infrastructure, a digitally skilled workforce and digital-friendly policies.
What firms can do, even in tough conditions
While countries must invest in infrastructure, skills and regulation to enable digital transformation, the report shows how firms can take action to make up – at least partially – for what the environment lacks. In fact, expert users in challenging environments take three critical actions:
- Improve financial management, allowing them to afford high internet costs even when infrastructure is poor.
- Train staff and recruit strategically, helping firms build needed digital skills from within.
- Engage with strong business support organizations, which provide guidance, networks and advocacy in navigating complex digital ecosystems.
A roadmap for inclusive transformation
The report features a Digital Transformation Action Plan that outlines a menu of policy and business measures that decisionmakers can adopt, depending on a country’s needs and circumstances.
The SME Competitiveness Outlook 2025 highlights how with the right support, all businesses – regardless of size, sector and geographic location – can benefit from the take-up of digital tools to transform and scale their businesses.
