It is a well-known fact that small and medium–sized enterprises (SMEs) constitute 99% of all businesses in the European Union.   By default, they are the backbone of the EU economy, driving job creation, economic growth, competitiveness and innovation. Within this vast landscape, the EU specifically classifies microenterprises as those employing fewer than 10 employees and with an annual turnover or balance sheet below €2 million.

For these smaller players, digitalisation is actively shaping the future.  While the term has become a buzzword, it encapsulates many elements of modern business: the optimisation processes, the automation of routine tasks to boost productivity, and the shift towards data-driven decision-making. It also refers to integrating “Industry 4.0’’ technologies – such as Artificial Intelligence (AI), the Internet of Things (IoT), blockchain and data analytics – to make operations agile and adaptable.

Ideally, digitalisation serves as a tool for strategic evolution, driving innovation, and future-readiness. However, in reality, businesses face a myriad of daily challenges. Many struggle to fund necessary investments in hardware and software, creating a persistent “access to finance” gap. On a technical level, smaller firms often lack the high-capacity broadband infrastructure required to use data-driven tools effectively. This all leads to a “digital adoption gap”, where micro-enterprises lag behind larger companies in using advanced tech like e-commerce, cloud services, and AI. Why should a microentrepreneur, already tackling time constraints, with limited labour force and budgets, make the extra effort to embrace digitalisation?

Recognising these challenges, targeted support is essential to help business bridge the gap. The Malta Business Bureau (MBB) is currently headlining an ERASMUS+ funded project titled DIGI-ELEVATE. Together with its European partners, this initiative is designed to help micro-entrepreneurs strengthen their digital capabilities and sharpen their competitive edge. The project aims to deliver its goals through a comprehensive learning model established through a research phase which will help the partners develop a new curriculum and outline the learning outcomes. This will be followed by the development of a massive open online course (MOOC) which will be available on demand and feature e-learning tools. The MOOC will then undergo pilot testing before being disseminated widely with its target audience. Projects like DIGI-ELEVATE are crucial because, ultimately, digital intensity can close the divide between smaller firms and large corporations.  The Covid-19 crisis, six years ago, showcased that digitalisation allows companies to pivot to new business models and adapt to global changes.

Beyond survival, the benefits of digitalisation for businesses can be summarised into four primary pillars: customer centricity, operational excellence, human empowerment, and strategic growth.

Digitalisation helps businesses understand customer needs leading to tailored journeys and increased accessibility and responsiveness. Digitising internal resources – such as smart inventory and resource management – reduces waste and increases output, making businesses more agile to market shifts. Cloud-based tools and virtual channels improve workforce effectiveness by boosting collaboration among staff. Finally, businesses can increase their competitive edge by bringing innovative products to market faster, diversify revenue streams through e-commerce, and enhancing data protection via encryption and multi-factor authentication.

The importance of this transition is reflected in the EU’s digital regulatory framework. Over the last 12 years, the ‘digital acquis’ has quadrupled in scale –  rising from approximately 20 to 88 digitalisation laws- to include major acts like the GDPR, the AI Act, and the Digital Services Act (DSA)— The rapid legislative growth has created a dense web of complexity that the EU is attempting to resolve through the recently published Digital Omnibus.

So where do microenterprises stand today? To determine their current position in the digital landscape, entrepreneurs can utilise the EU’s Digital Maturity Assessment (DMA) tool. This resource is designed to help SMEs pinpoint technical strengths and uncover opportunities for growth by evaluating digital business strategy, digital readiness, digital skills and empowerment, data management, automation and intelligence and green digitalisation.

By making good use of these assessments and support networks like DIGI-ELEVATE, micro-entrepreneurs can move beyond merely surviving the digital shift to actively driving it.