India’s SMEs account for nearly 30 per cent of the nation’s GDP. Spanning 63.4 million units, SMEs in India employ around 460 million people. The SME sector also makes up for 33.4 per cent of India’s manufacturing output. In terms of exports, SMEs contribute an estimated 45 per cent of total exports.
Despite contributing a sizable chunk to India’s GDP, stiff and inefficient operating models and a slow rate of technological adoption means that Indian SMEs have yet to achieve their full potential. Google’s research in collaboration with consultancy firm KPMG revealed that 68 per cent of the 51 million SMEs are not connected to the internet. The study also found that the digital transformation of Indian SMEs could help them achieve 10 more percentage points in terms of contribution to India’s GDP. Theoretically, an additional 40per cent or so could be achieved by 2020.
SMEs will play a key role in helping to achieve the finance ministry’s recently set target of a 5 trillion dollar economy. The only thing keeping them from reaching this goal is the lack of technology adoption. This is where major opportunities for tech companies arise.
The Google-KPMG research has also revealed that digitally-empowered SMEs have about twice the revenue growth compared to offline SMEs. Therefore, tech companies could potentially profit tremendously by helping SMEs grow through technology innovation. In an effort to fill the widening gap between large and small businesses, tech companies are fast competing to provide digital infrastructure support to SMEs.
A number of tech and communications companies are already making a move to expand the digital benefits and make them more inclusive for SMEs. One such example is telecom giant, Reliance Jio, whose recent partnership with Microsoft will help provide the cloud services that Jio would need to scale their digital infrastructure services to millions of SMEs across India.
Reliance is not the only one working to bring digitisation to Indian SMEs. Recently, large tech companies like Dell, HP, Intel, Vodafone Idea and WhatsApp came together under the guidance of industry body Confederation of Indian Industry (CII) for project called Tech-Saksham.
This project plans to reach out to over 10,000 SMEs, with tech companies working with them to overcome challenges involved with adopting technology. They will provide the resources and expertise needed to ensure India’s massive SME base gets the digital assistance they badly need.
Shreekant Somany, Chairman, CII National MSME Council stated the direct benefit of the project involving the technology players will be made available through training programmes and workshops on the latest technological solutions such as cloud computing, and market access for trade and exports.