The digitalisation of small and medium businesses (SMBs) could add $158-216 billion to India’s GDP by 2024 and contribute to the economic recovery post the Covid-19 pandemic, according to a Cisco report.
According to the study, SMBs that are more digitally mature enjoy twice as many benefits in terms of revenue and productivity compared to those that have an indifferent approach to digitalisation.
About 68 per cent of Indian SMBs seek to digitally transform to introduce new products and services, differentiate themselves from the competition, and grow, while 60 per cent recognise that competition is transforming and they must keep pace, and 50 per cent seek digital transformation due to customer demand for change.
The study — titled ‘Cisco India SMB Digital Maturity Study 2020’ — is based on a survey of SMBs from across the Asia Pacific region, conducted by IDC and commissioned by Cisco.
“During this time, 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. In these efforts, most small businesses have realised that going digital is critical and are displaying a willingness to disrupt themselves,” said Panish PK, Managing Director, SMB, Cisco India and SAARC.
The study says that the cloud, a foundational pillar for digitalisation, is the top technology investment priority for SMBs in India (16 per cent), followed by security (13 per cent) and purchase or upgrade of IT infrastructure software (12 per cent).
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).
“While technology will serve as the greatest enabler in helping SMBs leverage the opportunities created by the emerging low-touch economy, this crisis is far too complex for anyone to solve alone. Now more than ever, we need to work together to navigate these uncharted waters,” Panish added.