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SME digitalisation can add $216bn to GDP
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SME Times News Bureau | 28 Jul, 2020
The digital transformation of small and medium businesses (SMBs) could
add up to $216 billion to India's GDP by 2024 and contribute to the
country's economic recovery post Covid-19, a new study said on Tuesday. According
to Cisco India's ‘SMB Digital Maturity Study 2020,' 68 per cent of the
Indian SMBs seek to digitally transform to introduce new products and
services, differentiate themselves from the competition and grow.
"While
60 per cent recognise that competition is transforming and they must
keep pace, and 50 per cent seek digital transformation due to customer
demand for change," the report mentioned.
There are an estimated
42.5 million registered and unregistered SMBs in India, a staggering 95
per cent of the total industrial units in the country, according to
Nasscom. In these tough times, "small businesses have been
grappling with drastically reduced liquidity, disrupted supply chains,
and lending challenges. To bounce back, they need to pivot and adapt
swiftly, reimagine their business models, and identify their place and
role in the new normal." said Panish PK, Managing Director, SMB, Cisco
India and SAARC.
Most small businesses have realised that going digital is critical and are displaying a willingness to disrupt themselves.
The
study, based on a survey of SMBs from across the Asia-Pacific region
conducted by the IDC and commissioned by Cisco, showed that Cloud is the
top technology investment priority for SMBs in India (16 per cent),
followed by security (13 per cent) and purchase or upgrade of IT
infrastructure software (12 per cent).
However, SMBs are also facing challenges on this front.
According
to the respondents, a shortage of digital skills and access to talent,
and lack of necessary technologies are the top hurdles for SMBs in their
digital transformation efforts (16 per cent each).
"To
help address their challenge of talent, our networking academy has so
far trained more than 182,000 students across India in FY20," informed
Panish.
For the Asia Pacific region in general, SMBs continue to make progress in their digitalization journeys, despite challenges.
According
to the study, 16 percent of SMBs in the region are now in the advanced
digital maturity stages (3 and 4), compared to 11 per cent in 2019.
Slightly more than half of SMBs have embraced digitalisation to become Digital Observers (stage 2).
Only 31 per cent of SMBs are still reactive to market changes and have made hardly any efforts to transform digitally (stage 1).
"Given
the rapidly changing market conditions and speed of technology
evolution, SMBs should work with the right industry partners to ensure
they can maximise their technology investments and thrive in their
digitalisation journeys," said Daniel-Zoe Jimenez, AVP, Head Digital
Transformation & SMB research at IDC.
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As on 13 Aug, 2022 |
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