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Almost all sectors of India are undergoing a significant transformation thanks to digital initiatives brought about by new-age technologies such as artificial intelligence, data analytics, and machine learning. This blog makes you gain knowledge about Technology Can Empower the Indian MSME Landscape. #ThinkWithNiche
Micro, Small, and Medium Enterprises in India are playing a pivotal role in generating employment opportunities at lower capital costs, reducing regional imbalances, and promoting industrialization in rural areas. Almost all sectors of India are undergoing a significant transformation thanks to digital initiatives brought about by new-age technologies such as artificial intelligence, data analytics, and machine learning.
Micro, Small and Medium Enterprises in India
India has 22.63 million MSMEs which accounted for 48% of India’s manufacturing output of more than 13.7 million metric tonnes. MSMEs are organized into small units with minimum capital requirements and minimal skills. Micro-scale units have less than 10 workers, with around half of these units having less than three workers. Medium-scale units have more than 10 workers, and the average worker strength is between 20 and 40 workers. The biggest number of MSMEs have less than 20 employees, and the average worker strength in these units is less than 20. Of the total, over 11.6 million units were engaged in manufacturing, while 5.6 million units were engaged in trade.
The Future of the Indian MSME Landscape
The changing dynamics of the digital economy and the movement towards less-cash transactions present an opportunity for large corporates and larger financial institutions to leverage MSMEs to increase their earning opportunities through new distribution channels. A recent report by HDFC Ergo – an Ergo Group company – indicates that a market of 10.7 million MSMEs is on the verge of transformation as the shift to the digital economy has largely benefitted medium enterprises (MSMEs) and SMEs.The good news is that MSMEs also understand that technology will provide them with new options to secure funding and ensure a better business growth trajectory.
How Technology can Empower the Indian MSME Landscape
The changing nature of technology adoption has seen the opportunity of utilizing technology effectively in the entrepreneurial ecosystem. Today, a small enterprise needs a computer, a cell phone, a printer, a scanner, a videographer, a reporter, and a carpenter to run an organization. Even though they are running an organization, they are probably never sitting with the same group of people. Nowadays, they are multi-location and multi-city, and the number of employees in an organization has increased by a thousand times. They are moving on to software applications that use apps to share work, make decisions, handle time-bound processes, and manage cash flow. In a way, the whole software-driven organization is becoming a technology-enabled organization.
How Artificial Intelligence is Changing the Industry
As per a McKinsey & Company report, using data and analytics to boost productivity, add value and create a new customer experience is the new focus area for Indian SMEs. The report says that a single company can increase the value of its customer relationship by 40 percent by applying advanced data analytics to predictive analytics. This report also states that an organization with annual revenue of $300 million can increase the value of its customer relationship by a whopping $2 million through data and analytics. The government of India has formulated the MSME Policy to enable the growth of MSMEs, which are heavily dependent on cash.
What are some ways to make investments in Artificial Intelligence?
These technologies provide a unique opportunity to MSMEs in a few ways. First, data scientists and software engineers working for businesses have an opportunity to work for startups in an ecosystem that requires a mastery of technology and market cycles in a startup environment. Also, projects that typically require the work of several teams working with multiple technology vendors can now be accomplished with a single small-team effort. More importantly, many of the new technology initiatives being led by state-owned enterprises have opened up for startups. For example, The Centre for Development of Advanced Computing has announced a 10-year $1 billion fund, which will aim to support Indian start-ups in the areas of advanced computational sciences, data sciences, and financial technology.
Conclusion
The collaboration between Microsoft and NASSCOM will drive innovation in India and contribute towards creating a digitally empowered, inclusive, and innovation-led society. Being a part of this joint effort, we hope to be a catalyst for technology-driven economic transformation in India.
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