On December 18, representatives from 18 provinces and 36 pilot cities across China gathered in Chengdu for an on-site exchange event focused on digital transformation for small and medium-sized enterprises (SMEs). Attendees included officials from the Ministry of Industry and Information Technology (MIIT), local government leaders, and exemplary enterprises excelling in digital transformation.
**The Challenges of SME Digital Transformation** One local industry bureau director starkly summarized the dilemma: "Not transforming is waiting for death; transforming is courting death." Data reveals that 90% of digital transformation failures occur in the early or mid-stages. With the pilot program nearing its deadline, some cities lag behind—some achieving less than 30% of their targets, and a few below 15%.
Despite the hurdles, transformation is unavoidable amid rapid AI advancements and industrial upgrades. Governments must assist SMEs reluctant or ill-equipped to transition. Pilot cities are expected to develop replicable models to turn experimental efforts into high-yield successes.
**Progress Falling Short** At the Chengdu meeting, Liang Zhifeng, Director of the MIIT’s SME Bureau, acknowledged the challenges: "After over two years, everyone has faced difficulties." Launched in June 2023, the pilot program aimed to cultivate "lighthouse" SMEs, nurture digital service providers, and develop agile solutions. Targets included transforming 500, 400, and 300 enterprises in eastern, central, and western regions, respectively.
However, by October 2024, progress lagged significantly—six cities achieved less than 15% of their goals. Liang urged cities to bridge gaps and avoid superficial efforts, emphasizing measurable outcomes like efficiency gains and cost reductions.
**The Transformation Dilemma** SMEs grapple with three core issues: reluctance (lack of awareness), fear (high costs/risks), and inability (lack of solutions/talent). Liang Xiaobing, Director of Loudi City’s Industry Bureau, likened the situation to "choosing between two deaths." Mid-stage execution proves critical—90% of failures stem from mismatched solutions or employee resistance.
Notably, digital projects average a 4.2-year ROI, deterring investment. Over half of SMEs struggle to afford skilled digital talent. Liang Zhifeng stressed that pilot cities must pioneer replicable strategies to guide subsequent phases.
**Chengdu’s Success Stories** Two Chengdu-based firms shared breakthroughs. One, a subsidiary of listed magnet producer Galaxy Magnets, overcame data fragmentation and manual defects detection via government-supported digital upgrades. Post-transformation, it targets a 60% productivity rise, 40% lower quality costs, and 18% reduced processing expenses.
AI-powered visual inspection systems now enhance accuracy, reducing human error. Liang Zhifeng highlighted AI’s long-term potential, urging SMEs to build foundational models with government support.
**Sichuan’s Collaborative Model** Sichuan’s approach emphasizes demonstration and chain-wide collaboration. For example, Deyang City’s state-owned Dongfang Electric spurred supply chain digitization, boosting partner efficiency by 30% and cutting costs by 20%. Chengdu’s online platform streamlines service procurement, improving approval efficiency by 70%.
In Chengdu’s High-Tech Zone, BOE drove 50+ suppliers to adopt industrial internet platforms, while Longquanyi District saw inventory turnover rise 22% among parts manufacturers. To date, 482 pilot firms have completed transformations, propelling over 3,117 industrial enterprises forward and establishing 405 smart workshops, including three global "Lighthouse Factories."
The event underscored Sichuan’s leadership in fostering scalable, collaborative digital ecosystems for SMEs.
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