The last decade was, in a way, entirely dedicated to technology and its advancements. It is hard not to notice the massive changes that technology adoption brought to our lifestyles at large. Over these years, new-age technology has empowered consumers and has provided unlimited access to information, products, and services through digital channels. As the pace of technology and trends increased, businesses needed to evolve at the same pace to keep at par with the new consumer demands.
Consumer-related sectors and industries are enabling technology as a product or service experience to meet these current consumer demands. Over the past two years, consumer trends have especially taken a massive shift with interest and inclination towards a complete tech experience. Owing to these, the operating styles of businesses are further anticipated to go through a sea of change in the ongoing decade.
Our country’s important and potent business sector- the SMEs, also experienced an impressive adoption of digital models. Over the last two years, lockdowns and social distancing norms changed how these conventional entrepreneurs think with operations and smart digital working solutions. It is safe to say that while the last decade was for tech, the ongoing decade is entirely about the transformation of the SME business landscape in India.
The massive uptake of digitization in SMEs
We cannot emphasize enough how the pandemic-induced lockdowns and social distancing measures brought about a radical change in re-thinking business models with a large emphasis on digitization. Digital adoption in SMEs began with uncertainties of restrictions, disrupted cash flow, and supply chain has now taken the industry to a whole new level of tech adoption that is further going to pave the way for growth for the 6.3 crore MSMEs in India.
Statistics also show that SMEs are mainly relying on digital transactions. In totality, 72% of these businesses adopt digital payments and transactions, while 28% still use cash transactions efficiently. This rise in digital modes of payments is another promising factor in their growth and prosperity in the decade we are currently operating in.
Data is powerful and will pave the way for business activities.
The period between 2010-2020 was dedicated entirely to the internet revolution going as far as the last miles in the country. With over half a billion internet subscribers, India is one of the largest and fastest-growing markets for digital consumers, and the rapid growth has been propelled by public and private sectors alike. What people were thinking was a want has now become a must-have when we talk about smartphones and the internet. Data is truly going to empower lives and businesses in years to come.
Similarly, consumers are fast moving towards adopting tech as a must-have instead of a need, and this change is the sole reason behind the change in business activities. Consumer shift directly affects businesses’ nature and operations. Tying this back to SMEs, A high percentage of businesses are further anticipated to use data using technology methods to account for transactions and account keeping. In the early years, SMEs operated solely on cash, and that led to inaccurate data collection and, subsequently, poor bookkeeping. However, the advent of technology shows a promising rise in detailed and on-time bookkeeping that will further help these businesses streamline their accounts and improve their payment cycles.
Experimentation will lead to growth.
A large part of the SMEs in the past decade was born and rose from traditional business methods. However, that is now starting to change. Our country’s conventional entrepreneurs, who were previously not susceptible to change, have begun to implement technology and related practices to improve their business activities, operations, and, subsequently, outcomes.
The implementation of GST and demonetization helped a great deal in simplifying data entry and the taxation process and streamlining the largely unorganized MSME sector. This change brought many businesses under the umbrella of digital India. The fast-moving tech adoption will create a similar effect on business operations and pave the way for smarter payment management.
Government support and initiatives to back MSMEs
Following the Make in India or the Atmanirbhar Bharat initiative, the budget allocation for MSMEs in FY22 has doubled to a whopping 15,700 crore compared to that of Rs 7,572 in FY2021. The Ministry of India has initiated a few beneficial schemes that are targeted at providing financial and credit assistance, infrastructure development, skill development, and tech up-gradation for the 6.3 crore MSMEs in India.
Support for High adoption of e-commerce
The government has been introducing initiatives such as the Make in India, Digital India, Start-up India, Skill India, and Innovation Fund to accelerate e-commerce in India. It is also encouraging MSMEs to market their products on e-commerce sites owing to the shift of consumers preferring to shop online, which only increased with the wake of the COVID-19 pandemic. As part of the Digital India initiative, the Ministry of MSMEs undertook numerous initiatives to digitize the entire MSME ecosystem, and the current trends will further make way for penetrated e-commerce adoption in MSMEs in India.
These factors will all come together to play a role in defining and shaping this decade of SME Tech!
Views expressed in this article are the personal opinion of Winny Patro, CEO & Co-Founder, Recordent.