By Dinesh Agarwal, Founder & CEO, IndiaMART
IndiaMART is a 1996 founded online B2B marketplace that matches buyers and suppliers. Technology adoption is regarded as the catalyst for the growth of any economy, and is a critical pillar to meet the strategic objectives of various businesses. Globally, various countries are technologically superior, and are strongly driving growth on the basis of innovation. European companies, specifically German companies, are quite robust and their success is based on the strength and flexibility of their SMEs, which are responsible for contributing around 60-70 percent of their economic output. Chinese SMEs, with an internet adoption rate of 20-25 percent, contribute to about 70 percent of the country's GDP. India, too, is on a fast growth track.
Responsible for encouraging national and international trade, and providing employment to over 40 percent of India's population, it is no longer a secret that SMEs are one of the most powerful growth engines of the economy. However, due to their low scale and poor adoption of technology, their contribution to the country's GDP is only limited to 17 percent. Technology-equipped SMEs can fuel the growth of the economy beyond expectations. However, what really hinders its use in their business is perhaps its lack of availability, unreasonably high costs, absence of skilled labour to harness the power of technology and much more.
In the last few years, where on one hand, start-ups were on an incessable hunt for technology to advance their businesses; traditional SMEs on the other hand, were still in the process of breaking out of their cocoons, where technology adoption is concerned. We have now started witnessing a higher level of internet penetration, along with an unprecedented mobile internet revolution. Currently, there are approx. 173 million mobile internet users in India.
2015 has begun with a new promise of 'Make in India', giving a big spur to the manufacturing sector. An increased level of confidence has been seen amongst the SMEs. The SME Sentiment Survey conducted by IndiaMART in October 2014 revealed that 54 percent of these businesses were optimistic about the new government fostering an environment to boost positive growth in the country.
Use of complex technologies to make businesses simpler
With cut-throat competition on the rise on the entrepreneurial front, Indian businesses are gradually adopting advanced computing features and next generation business software. The acceptance of IT including Cloud, Analytics and Mobile by SMEs is growing. A recent Circle Research Global Report states that Indian SMEs look for cloud, analytics and mobile solutions to improve operations and become more efficient. Going by the numbers, IT spend in the Indian SME segment is expected to reach $18.5 billion by FY 2018.
On the contrary, a Google-FICCI survey revealed that only 5 percent of Indian SMEs have a website despite the fact that web-enabled SMEs had 51 percent higher revenues, 49 percent
more profit, and 7 percent larger customer base than their offline-only brethren.
Today, businesses have the option to choose SaaS support from a variety of verticals like HR, accounting, procurement, billing, customer relationship management (CRM), sales & marketing, enterprise resource planning (ERP), and business intelligence (BI), saving them substantial cost.
An inevitable path to success, technology adoption could bring tremendous waves of change in the economy, where SME woes could be a thing of the past.
Indian SMEs are extremely hopeful, with the new Government expressing strong concern for their growth and taking the necessary measures for the development of the manufacturing sector in the country. It promises to break the barriers of technology and has already started to engage foreign players and form technological relations on global platform. All this would ensure that SMEs compete more effectively with the larger businesses.
Establishing the 'Make in India' campaign is not the end of the battle. The battle is longer. It requires constant attention from the Center to fuel the wave of SME transformation. What is required is a clear strategy along with a definite roadmap for implementation. Efforts should be made to scale up internet penetration among the SMEs, while also providing subsidies in technology. Affordable solutions such as easy installments, credit options, and pay-as-you-go options can provide sustainable solutions towards addressing cost concerns. Additionally, software should be easy to use and offered in local languages to breakdown the perceived complexity of IT.
Manpower training for start-ups is essential, as it would facilitate skill development of the businesses. NSIC (National Small Industries Corporation) plays a very important role in imparting training to the would-be entrepreneurs. It is already in the process of expanding its scheme (Rapid Incubation for Entrepreneurship Development) to more states and countries.
The Government's new plan to roll out free Wi-Fi internet connections in 2,500 cities and towns across the country, under the 'Digital India' initiative, is a step to transform India into a digitally empowered economy.
I feel it is the right time to take a step forward towards making our businesses technology-equipped. The Government is committed to take the necessary steps and actions and provide strong support. However, it is important that we tread towards the path of advancement ourselves!