Source: ALFA
Despite the importance of Small and Medium-sized Enterprises (SMEs) for the Lithuanian and global economy, many of them lack the courage and resources to maximise their innovation potential. The pace of transformation of SMEs is becoming an essential prerequisite for their future competitiveness, believes Tabriz Mamarakhimov, Chief Operating Officer at SEAL Group.
Digital tools are rapidly transforming industries and businesses must adapt or risk being left behind in an increasingly competitive global market, says Mamarakhimov.
In Lithuania, around 62% of SMEs still do not use advanced technologies such as cloud computing, IoT and automation that could significantly improve their performance. This technology gap is caused by several barriers, the most important of which is limited access to finance.
Many small businesses lack the capital to invest in technology, which prevents them from competing effectively in a digital-first world. This problem is compounded by a general lack of digital skills among employees, which makes it difficult for SMEs to adopt new technologies, even with funding.
“One of the main misconceptions among Lithuanian entrepreneurs is that technology deployment is expensive and only suitable for large companies,” says T. Mamarakhimov.
Even small-scale digital tools can significantly improve decision-making processes, he says. This belief needs to change, recognising that refusing to embrace new technologies risks falling behind competitors who are already using IoT, big data and automation to optimise their operations.
Still not using AI?
While 2024 was the year for the first IoT research, this year companies are moving beyond experimentation and starting to implement IoT solutions in all areas of their business.
“While the IoT could be the best helper for SMEs, the uptake of the IoT in Lithuania is slower than it could be. While many companies understand the theoretical potential of the technology, they are struggling to apply it effectively,” he says.
He believes that entrepreneurs are often concerned about the shortage of highly skilled professionals. But the IoT can be a revolutionary tool: it automates routine tasks, streamlines processes and optimises the use of resources. The main challenge is to overcome the initial fear and develop a clear implementation strategy.
Businesses that do not adopt IoT technologies face serious consequences – the gap between large businesses and SMEs will widen further.
“Gartner research shows that by 2025, more than 60 per cent of organisations will have a formal IoT strategy in place and investment in IoT will grow exponentially, according to Reuters.
Global initiatives such as the EU Digital Skills and Jobs Coalition aim to train 20 million people in advanced digital skills by 2030. Businesses that start these efforts now will be able to turn today’s skills gap into tomorrow’s competitive advantage.
“Our experience shows that the IoT can deliver significant resource savings. For example, in one of our projects at SEAL Group, we considered using IoT to analyse parking data – a system that would evaluate photos and determine whether a car was parked correctly. If not, it would prevent the car from being locked,” says the holding’s operations manager.
Digital marketing – untapped potential
Lithuania has a huge but still untapped potential in the field of digital marketing, believes T. Mamarakhimov. Many companies are just starting to explore the possibilities in this area. By analysing demand in different markets, automating campaigns and relying on data-driven insights, companies can achieve huge results and grow faster.
“However, I often see that companies are reluctant to invest in marketing, either because they don’t understand the potential or because they don’t want to spend money. I’ve seen cases where companies don’t allocate any budget to marketing and sales teams are forced to generate revenue on their own – which is definitely more difficult,” he says, adding that even a small investment can bring incredible results. “For example, with a daily budget of €30 for a digital advertising campaign, one of our companies generated ten times more than the investment. The return on investment speaks for itself, and Lithuanian companies should realise that effective digital marketing is not a luxury, but a necessity for growth.”
The future of SMEs – technology-led growth
According to him, despite the progress, Lithuanian businesses face several weaknesses on the road to digital transformation: ‘Many companies do not have a clear strategy for technology adoption, others struggle with insufficient investment or a lack of skilled professionals. In addition, organisations often lack a culture of innovation – a willingness to experiment and embrace change”.
The CEO believes that companies need to invest first in digital literacy by training their employees through workshops and training. Secondly, cooperation with IT companies can speed up the adoption of technology. Thirdly, companies should actively seek government support, such as tax breaks and other initiatives to encourage innovation.
Without these steps, progress will be slow and companies risk falling further behind the world leaders.
The Lithuanian government has already taken steps to support small and medium-sized enterprises through initiatives such as the Smart Industry programme and Digital Innovation Centres. These programmes provide valuable resources, knowledge and training for companies seeking to adopt new technologies.
At EU level, initiatives such as the Digital Decade aim to accelerate digitisation among Member States by setting ambitious targets for the adoption of advanced technologies by small and medium-sized enterprises by 2030.
The future of Lithuania’s SMEs lies in embracing technology, from artificial intelligence to automation, and using digital tools to drive growth and efficiency.
“While the challenges are many – including financial barriers, digital skills shortages and cultural resilience – we cannot afford to stand still. As businesses, we need to invest in the skills, strategies and mindsets needed to deliver this transformation,” concludes Mamarakhimov.
By overcoming fears, strategically allocating resources and boldly embarking on the path of digitalisation, he says, Lithuanian companies can not only catch up with world leaders, but also become pioneers in innovation. The window of opportunity is narrowing and those who fail to act risk being left behind.
