MSMEs To Adapt And Embrace Digital Solutions To Accelerate Growth

For the MSME sector, the time is ripe to embrace the future and transform prevailing business challenges, particularly for the post-pandemic economy.


January 7, 2021 The emergence of Industry 4.0 has resulted in business processes becoming automated and establishing new productivity benchmarks. With emerging technologies, including AI, the Internet of Things (IoT), and the cloud becoming more mainstream, the entire business landscape is transforming rapidly. 

While MSMEs undoubtedly serve as the backbone of the economy owing to their high share of employment and value-addition, a strong focus on digitalisation and innovation is the need of the hour to sustain and engage in global markets. 

At a recently concluded MSME Business Forum session, Shri Ramanan Ramanathan, Mission Director, Atal Innovation Mission, Niti Aayog, said, "India's MSME sector makes a vast and critical contribution to the country's economy. With contributions of around 6.11% of the manufacturing GDP, 24.63% of the GDP from service activities, and 33.4% of India's manufacturing output, India's MSMEs have the potential to leapfrog and scale new heights by adopting digital technologies. India is at the crossroads of a new destiny, and every factor works in India's favour. However, I believe that the potential is much more immense. And today when you look at the overall digital ecosystem that is being built. India has a young population and a fast-rising Internet user base. 65% of India's Internet users access the Internet every day."

Atal Innovation Mission (AIM), a flagship initiative of the Government of India under the Niti Aayog, is committed to creating and promoting an ecosystem of innovation and entrepreneurship nationwide stimulating the growth of a nation of job creators, not just job seekers. To ensure above and scale-up the MSME contribution to the GDP to 50%, AIM has launched over 68 Atal incubators, fostering thousands of Startups, Atal Community Centers in Tier 2, Tier 3 cities in rural India.

To enable community-centric innovations and local entrepreneurship and job creation, ARISE and Atal New India challenges help Make in India innovations in the MSME industry in partnership with ministries. These and many other Government Digital India initiatives will enable unprecedented growth of the MSME industry in the years ahead.

"With massive support from the Indian Government for going digital, India is leading the growth in driving digital initiatives. India is the fastest-growing e-commerce market; digital payments have grown at a CAGR of 61% over the past three years. As one can see, undoubtedly, India is one of the biggest markets for digital users. MSMEs can leapfrog to the next level and power India's economy to a different level by leveraging digital technologies' power. 

Today, the rise of as-a-service models has made technology consumption and adoption extremely affordable. MSMEs can use technologies such as the cloud to roll out digital business models quickly. Additionally, technologies like AI, IoT, Blockchain, and Analytics can be leveraged to their full potential to roll out innovative products and service business models. 

The Indian MSME sector stands at the cusp of a new dawn. It has a golden opportunity to springboard to a new level by leveraging digital technologies' power and potential. For the MSME sector, it is now time to embrace the future, and this is the perfect time to do so!" added Shri Ramanathan.

A large pool of MSMEs in India still relies on manual documentation and legacy on-premise IT infrastructure, bound to become obsolete with intense competition and changing consumer behaviours in the coming years. A shift from a legacy mindset now is a must for business owners to stay relevant and leverage the potential of new tools and systems.

"Digital transformation offers extensive possibilities to SMEs for innovation and expansion. With disruptive technologies becoming more affordable and user friendly, a micro or small business owner can now integrate cutting edge tools to his existing IT framework with little or no help. 

With the ability to interact with the data generated by business processes coupled with real-time insights into operations, the MSME segment's contribution to India's economy can soar many folds." said Ravi Nandan Sinha, Director of Development, MSME Business Forum.

The' Digital Prarambh' series conducted with the support of MSME enablers like HyLyt, multi-platform information management, and sharing app enabling users to collaborate and methodically store the information they need to make them robust, productive, and profitable and supporting partner Wadhwani Foundation.

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