How Technology Can Empower the Indian MSME Landscape

Micro, Small, and Medium Enterprises What is MSMEs? In India, they play a key role in creating employment opportunities at lower capital costs, reducing regional imbalances, and encouraging industrialization in rural areas.

Nearly all Indian sectors are experiencing significant transformations thanks to digital technologies like artificial intelligence, machine learning, and data analytics.

Small, Medium and Large Enterprises India

India has 22.63 million MSMEs which accounted for 48% in India’s total manufacturing output of over 13.7 Million metric tons. MSMEs are small units that require minimal capital and have low skills. A micro-scale unit has less than 10 employees, and around half of them have less than three. Medium-sized units employ more workers than 10, with an average worker strength of between 20-40 workers.

Most MSMEs employ less than 20 people, with an average workforce strength of less than 20. Over 11.6 million units were involved in manufacturing and 5.6 million units in trade.

The Future Indian MSME Landscape

Large corporate houses and financial institutions have the opportunity to use MSMEs to increase their earnings opportunities through new distribution channels, thanks to the changing dynamics of digital economy.

A recent report from HDFC Ergo (About Ergo Group) indicates that there is a market of 10.7 million MSMEs on the verge to transformation. The shift to digital economics has largely benefited medium and large enterprises (MSMEs), and SMEs are also able to access new funding options and improve their business growth.

Let’s explore how technology is empowering the Indian MSME landscape…

Technology adoption is changing, which has opened up the possibility of using technology in a positive way within the entrepreneurial ecosystem. A small business today needs a computer and a cell phone.

They are unlikely to be seated with the same people, even though they run an organization. They are now multi-located and multi-city and the number and diversity of employees within an organization has increased by 1,000 times. They are now using software apps to manage cash flow, share work, make decisions and handle time-bound processes. The whole software-driven company is now technology-enabled.

How Artificial Intelligence Is Changing the Industry

According to a McKinsey& Company report, Indian SMEs should be focusing on using data and analytics in order to increase productivity, add value, and create a new customer experience. A single company can improve the value of its customer relationships by 40% by using advanced data analytics and predictive analytics.

The report states that organizations with an annual revenue of $300 million can increase their customer relationships by $2 Million using data and analytics. To support the growth of MSMEs that are heavily dependent upon cash, the Government of India GOI has created the MSME policy (MSME &Startups Forum – Bharat). Atmanirbhar Bharat, which means “self-reliant India”, is a result of the combined efforts of several MSMEs. It was popularized by Narendra Modi, Prime Minister of India, and the Government of India to promote inclusive growth and economic development.

How Technology investment is driving the MSME Sector in India?

The MSME’s can make technology work for them in many ways. Data analytics, big data transformation, system-driven operations, digital platforms, and automation of supply chain processes by means of artificial intelligence and machine learning make ease-of-doing-business (Ranking of Indian States for Ease of Doing Business) a possibility with high productivity and profitability.

The technology implementation is critical for most business startups. These systems allow projects that used to require multiple teams and multiple vendors to be completed with one team.

Moreover, many of these new technology initiatives are being managed by state-owned forums. These enterprises offer easy adoption and support services.

The Centre for Development of Advanced Computing , (About CDAC) announced a 10-Year $1 Billillion Fund with the aim of supporting Indian Startups.

Collaboration between Microsoft and Nasscom will drive innovation in India. It will also contribute to creating a digitally empowered and innovation-led society. This collaboration will be the catalyst for technology driven economic transformationin India.


micro small medium enterprises, startup india, msme, new age technology

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