Digitization of small and medium businesses can add $216B to India’s GDP by 2024
India’s regional trade growth from 1991 until 1999 was minimal, according to the study titled “India’s limited trade connectivity with South Asia”. (Bloomberg Photo. Representative image). Sketched by the Pan Pacific Agency.
NEW DELHI, Jul 28, 2020, IANS. 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, Telangana Today reported.
According to Cisco India’s ‘SMB Digital Maturity Study 2020,’ 68 percent of the Indian SMBs seek to digitally transform to introduce new products and services, differentiate themselves from the competition, and grow.
“While 60 percent recognise that competition is transforming and they must keep pace, and 50 percent 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 percent 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 percent), followed by security (13 percent) and purchase or upgrade of IT infrastructure software (12 percent).
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 percent in 2019.
Slightly more than half of SMBs have embraced digitalisation to become Digital Observers (stage 2). Only 31 percent 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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