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Tech-based solutions can be the growth catalyst for India’s MSMEs

The MSMEs are witnessing a flash of digital transformation induced by the advent of the new-age economy and a host of new-age tech-based platforms

September 08, 2021 / 05:11 PM IST

COVID-19 has had a devastating impact on businesses across sectors. However, the MSME sector took the most brutal hit due to technological, capital, and scalability constraints. India has approximately 63 million MSMEs  and entrepreneurs that have showcased capabilities to innovate and create products. Accounting for more than 48 percent of the exports, 110 million jobs, and more than 30 percent of India’s GDP, the MSMEs are among one of the most critical spheres of the Indian economy.

Despite this crucial role, the MSMEs have been largely ignored. The scope of growth by technologically equipping and correctly integrating MSMEs into the larger ecosystem is immense. For example, estimates of the Ministry of MSME  show that mainstreaming MSMEs can double the ocean freight footprint while raising the export share by ~60 percent.

Although historically, the MSMEs have shown an aversion to change, COVID-19, among other factors, has compelled the sector to adapt to the current market reality. The MSMEs have started witnessing the flash of digital transformation induced by the advent of the new-age economy and a host of new-age-tech-based platforms. While offering access to new technology, new markets, and improved infrastructure, these platforms are changing the dynamics of the MSME ecosystem.

Digital Impact

While the sector has grown massively of the decades, most of the incremental growth has happened without leveraging technology. With multi-channel distribution, multi-modal needs, high service requirements, and involvement of multiple stakeholders, companies require greater visibility and control to ensure quality and timely delivery of goods. New-age tech-based platforms are helping MSMEs embrace integrated operations, thereby providing unparalleled transparency across the supply chain while enabling them to upscale operational capabilities within the organisation and the ecosystem.

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A Google-KPMG study revealed that digitally-empowered SMEs enjoy twice the revenue growth projections vis-a-vis offline SMEs. With state-of-the-art technology and domain expertise, tech companies allow MSMEs to plan and monitor logistics and create cross-departmental workflows while improving collaboration, execution, and profitability.

The Tech-Enabler

According to a Dun and Bradsheet survey, digitisation of daily activities during the pandemic reduced operational cost for 54 percent and enhanced competitiveness for 51 percent of SME survey participants. As the industry grows, technology will continue to get democratised; however, as the marketplace evolves, it will be necessary for the MSMEs to embrace technology and make it an integral part of their growing businesses. With digital adoption, the SMEs will likely add $158 billion to $216 billion to India’s GDP by 2024 , while more than 61 percent of the MSMEs can effectually rise to pre-COVID-19 levels in the near future.

Deep Tech

Technology has immense power to enrich small businesses with digital technologies that can help amplify the experience of the end customer. Harnessing new-age deep technologies such as Artificial Intelligence, Machine Learning, Augmented Reality, the Internet of Things, Data Intelligence, etc. can offer a competitive edge and empower small businesses to elevate and compete with large businesses. Data insights are the key drivers that can help expedite essential business decisions, such as adopting a new tool or entering a new market.

With the evolution of technology, numerous solutions have come up that allow MSMEs grow, evolve and compete with big corporations. Next-gen tools are helping MSMEs grow globally and expand their business seamlessly. There are numerous startups that aim to democratise the access to these advanced technologies, and if adopted by the MSMEs on a large scale it could usher in a new era for India’s economic growth.

Sanjay Bhatia is CEO & Co-Founder Freightwalla.

Views are personal and do not represent the stand of this publication.
Sanjay Bhatia is CEO & Co-Founder Freightwalla.
first published: Sep 8, 2021 05:03 pm

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