December 6, 2022

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New Pillars of the Indian Economy

Digital Technology has a huge impact on all conceivable aspects of life, and it is transforming business in the global economy. It can help MSMEs’ expand their market reach at domestic and international levels.  It is changing the shape of MSMEs at a faster pace. With appropriate digital strategies and quality products, anyone can make a big name for themselves in the market.

Creating an authentic presence is necessary in our digitally inclined world. It helps attract the targeted audience, which will help the company have a consistent and reliable image in the market.

Reliability is an important feature that will naturally help MSMEs expand in the digital space. Overcoming these issues will help various MSMEs survive the digital roadblock.

Importance of MSMEs for Indian Economy

The MSMEs have a 30 percent share in India’s GDP and employment and act as the pillars of our economy. 56 million MSMEs add products to address the specific needs of the nation and thus behave like entrepreneurs. MSMEs help to generate employment at the local level, and for a country like India, it’s the need of the hour. 

India SME forum conducted a survey, which had 1,29,537 MSMEs respondents; the survey showed that around 50 percent of MSME respondents claimed to know about the benefits of the usage of digital technologies. However, a shocking 70 percent of MSMEs lack the knowledge and understanding about digital tools. The main obstacle cited was the lack of knowledge which restricted the wider adoption of technology.

The pandemic became the revolution phase for various MSME sectors. India SME ministry is working hard towards lowering the digital gap by conducting informative workshops to help these convectional companies spread their business and cope up in these tough times.

Some Factors that are Making It Difficult for MSMEs to Spread their Wings in Full Potential

Now, lack of capital due to inadequate access to finance is a common issue that MSMEs face. Because of this, there is poor technological infrastructure which then results in low-quality production. This cycle causes people to avoid learning about digital technologies. Without tech-savvy and knowledgeable employees, digital innovation is not possible, so even if the company comes up with good digital marketing ideas, they can not implement them properly to get profitable results. Most of the problems that MSMEs face can be narrowed down to the lack of capital and technological expertise.

These factors make it difficult for MSMEs to escalate to full potential, rise to become self-sustainable and known.

For Micro Small Medium Enterprises, overcoming these problems offer a prosperous opportunity to strengthen the foundation of their company. Many traditional and convectional companies lack the understanding and knowledge of digital marketing; that makes them distant with correct digital technological solutions for their enterprises, which can affect their overall business turnover.

Those who do not trust technology and hesitate to invest in pricier but more effective digital equipment generally do not have the know-how about technology’s usage and benefits.

How to Adapt and Give a New Shape to MSMEs with Digital Technology?

New technologies have made it easier to innovate. This makes it necessary to ensure that you keep up with the trends and regularly upgrade your products to improve sales in the digital space. You want something that will help you stand out; for that- innovation is key. Technologies like AI/ML, IoT, Data Intelligence can immensely enhance small businesses, which give customers a quality experience and can help in creating an informative online presence.

With these digital technologies, MSMEs can easily compete with large business tycoons.

For making important business decisions, like deciding whether to adopt a new tool or enter a new market, you need data insights to understand the market situation better. To improve your understanding of the digital space is to focus on Data Insights. They will help you and your company adapt to new technologies faster.

MSMEs are the new pillars of the Indian Economy, and they have turned out to be crucial in the growth of our country. These sectors have helped immensely in uplifting the socio-economic sectors of India. Digital platforms can bring drastic changes for small businesses as they are valuable platforms that, with the help of apt strategies, can help you progress. The Ministry of MSMEs provides learning programs and schemes to help you adapt to the ever-evolving digital technologies. They even have a registration portal named Udyam, where you can register yourself to know about the beneficial policies that the government provide. Conventional businesses are now warming up to the concept of new digital technologies as they understand their benefits better.

The author of this article is Lokendra Ranawat, Co-Founder & CEO, Woodenstreet

The views and opinions expressed are not of IIFL Securities, indiainfoline.com

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