1、 itif.org How Digital Services Empower SMEs and Start-Ups TRELYSA LONG|AUGUST 2025 Digital services are the key to unlocking growth for small-and medium-sized enterprises in todays economy.They help firms overcome financial constraints,close skills gaps,and boost productivity.Policymakers should inc
2、entivize SMEs to capitalize on those opportunities.KEY TAKEAWAYS SMEs tend to have fewer financial resources,face greater skills gaps,and have lower productivity,making it difficult to scale up.Digital services are the key to reducing,or possibly even resolving,many of these barriers to growth.Inter
3、net platforms lower overall transaction costs for both buyers and sellers by reducing search costs,streamlining communication,and facilitating payments.As a result,they help SMEs reach more customers.AI is boosting marketing performance for SMEs,helping them optimize ad campaigns,target the right cu
4、stomers,and generate content at scale.Generative AI is also boosting SMEs productivity.Strong human resources and operations capabilities are essential drivers of SME growth and competitiveness.Digital payroll systems,employee onboarding tools,and HR management platforms play a critical role in thes
5、e areas.E-commerce platforms are fundamentally reshaping how SMEs reach customers.On average,26 percent of small businesses and 34 percent of medium-sized businesses in OECD countries were actively making e-commerce sales in 2023.To incentivize SMEs adoption of digital services,policymakers should d
6、esign targeted strategies to reduce adoption barriers and expand access to critical digital tools.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|AUGUST 2025 PAGE 2 CONTENTS Key Takeaways.1 Introduction.2 Internet Platforms:Connecting SMall Businesses To Customers.5 Advertising and Marketing in the Dig