Notes

that were already more prepared with higher levels of technologies, particularly digital technologies, before the pandemic were significantly more likely to accelerate adoption during the pandemic suggests that existing barriers may be persistent. These barriers are explored in detail in the next chapter, but include issues related to the lack of managerial capabilities, uncertainty, and limited access to markets. Many of these conditions have deteriorated disproportionally for small and female-led businesses during the pandemic, which is further widening the digital divide.

The pandemic has increased the awareness about digital technologies and the incentives to digitalize. As a result, governments and business-support organizations are intensifying the use of policy instruments to promote digital adoption and upgrading (see chapter 7). A recent survey conducted by the World Bank of public programs supporting businesses in Kenya shows that many of these programs have adjusted the services they provide by increasing support to digital solutions (Cruz and Hernandez 2022). About 48 percent of the programs that existed before the pandemic reported that they have started to offer or have expanded their offer of training and technical support related to digital solutions. Similarly, management extension services in countries such as Brazil are experiencing a shift of demand toward digital upgrading programs, and new programs are being created to tailor to the needs of SMEs in this area. These programs combine the provision of information with technical assistance, and are taking advantage of greater interest among SMEs for technology upgrading. Policy makers should seize the opportunity to accelerate and complete the digital transformation of SMEs. To do so, they need to understand the main barriers and obstacles to technology adoption. That is the objective of the next chapter.

Finally, the chapter has emphasized the central role of technology adoption to support adaptation to and mitigation of climate shocks, and the need to understand the adoption of green technologies from the perspective of the firm and the drivers of and barriers to their adoption, and their complementarities with other technologies.

Notes

1. The digital presence in sector-specific business technologies is usually different, especially for agriculture and manufacturing, where digital technologies are usually embedded in more sophisticated machinery and equipment that are, in most cases, frontier technologies. 2. The data show that small firms, which are on average later adopters of new technologies than large firms, are significantly more likely to adopt digital technologies applied to GBFs than SBFs, on average. 3. The assumption behind building the curves is the fact that larger firms are earlier adopters. See chapter 3. 4. This section draws heavily on Cusolito (2021), Nyman and Ukhaneva (forthcoming), World

Bank (2021), and Zhu et al. (forthcoming).