It’s high time that we have realized that power of Indian business comes not from just big business houses, but also from millions of small and medium enterprises (SMEs). While they account for almost 40 per cent of India’s GDP, a 2016 RBI study also concluded that more than 2.5 lakh unlisted SMEs outpaced the earnings growth of listed entities in the last three years. The SMEs have a high potential which, when awakened can make a State more attractive to both small and big investors.
SMEs have been making more than 90 per cent of all businesses in most economies. Reports and researched show that in India, the SME sector accounts for more than 17 per cent of the GDP and contributes to about 45 per cent of India’s industrial output and 40 per cent of total exports. In India, the data revolution is needed to achieve sustainable development goals. The destiny of SMEs, Indian States and India as a nation are interlinked and ‘Digital India’ can play a crucial role in the same.
A quick look on what going digital brings on the table-
The digital age has re-defined the meaning of size
Digital connectivity makes small companies more powerful than ever before. Giving them the ability to reach to more markets, access to finance and a power to grow bigger. Helping them to create value, provide more jobs and thus get better at what they do.
Digital innovation helps SMEs to integrate with national and international markets and other resources.There are so many marketplace solutions which have now started catering to the business-to-business (B2B) side in addition to just end retail consumers. Startups are coming up with solutions that can cater to small companies that can’t afford to buy expensive machines.
Technology is forcing banks to innovate a lot more for SMEs. It has majorly made finance much easily available. Startups have come up with apps that connect the business owners to the lending partners, peer-to-peer lending and various other variants giving SMEs a much better access to finance.
We have been taking initiatives to make small business not only better, but stronger as well. Digital space has provided more online tools giving connectivity to the last mile. At a State level, the need is to integrate digital into the DNAs of the small business owners and show them the bigger picture of how their business can reach the next level. States like Kerala, Telangana, Andhra Pradesh, etc. are making a lot of efforts in this direction. They know that if SMEs grow, they will be its biggest beneficiaries. In fact a lot of others States are also preparing themselves and promoting ‘Small is Big’. This can play a very vital role in unleashing the true power of SMEs in India. Every effort should be made in the direction of guiding the SMEs and giving them the tools and tips that will help in making a strong entrepreneurial ecosystem. It will be a game-changer for India. Interestingly the States and SME owners are also realizing that digital tool will able to bring out the power of women entrepreneurs turn their business ideas to dream big. It gives opportunities to the SME sector to be a game changer where the traditional societal approach has held back the true potential of Indian women entrepreneurs. Indian SMEs have shown statistics as low as having only 11 per cent of women in leadership roles, which is one of the lowest among the other countries.
Some SMEs run away from digitization due to the fear of high investments, and thus something that can give them a competitive advantage turns into the last priority. They need to understand that the digital platforms offer a lot more. Technology is both, a growth enabler as well as a great threat. While digitization opens new lines for business, a lack of it could help a competitor to completely destroy you. With limited budgets, it is difficult for SMEs to decide on which technologies they could invest in.
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