Experts decode the digital shift among MSMEs at TechSparks 2021

In a panel discussion at TechSparks 2021, experts decoded the ‘big digital shift’ within the MSME sector amidst the COVID-19 pandemic and how small businesses can deploy digital strategies to become future proof.

According to research firm IBEF, India is home to about 6.3 crores micro, small and medium enterprises (MSMEs). They form the backbone of the Indian economy, contributing about 30 percent to the GDP and having the second-largest workforce after agriculture. 

In fact, MSMEs contribute 48 percent to India’s exports, making them a major revenue generator for the country. 

To say the last few months have been difficult for this sector is an understatement. However, several MSMEs managed to survive, thanks to digital tools, including online payments and stores, helping them keep their businesses going. 

In a panel discussion titled, Future-proof strategies for building resilience with SMBs, at TechSparks 2021, experts decoded the ‘big digital shift’ within the MSME sector amidst the COVID-19 pandemic and how small businesses can deploy digital strategies to become future proof. 

The panel included Hardika Shah, Founder and CEO, Kinara Capital; Dinesh Agarwal, Founder, and CEO, IndiaMart; and Ashish Sikka, Director – SMB, Lenovo India. 

Decoding the digital shift

Hardika emphasised the digital shift among SMBs was largely driven by digital payments since small business owners were compelled to transact online. 

Ashish, further adding to the conversation, said for large businesses, leveraging technology means increasing efficiency, productivity, and more. It became a matter of survival for the smaller businesses.

Dinesh, who runs a B2B marketplace for MSMEs, IndiaMART, said, nothing of this sort has ever been witnessed in the last 25 years. “When the pandemic struck, nobody took it seriously. But as the months progressed, we realised its long-term impact,” he said.

He added COVID-19 “moved mountains,” as everything from teaching to banking was happening online. According to Dinesh, by facing a never-seen situation like the pandemic, “MSMEs have proven their resilience.” 

“While larger companies were operating from home, local kiranas, chemists and other SMBs were functioning on the frontlines,” he noted.

Reimagining the future for MSMEs

Hardika highlighted while COVID-19 accelerated digital adoption within the MSME sector, the companies are “not there as yet.” 

“Beyond digitisation, we have to figure out other things, such as power, logistics, access to credit, market, infrastructure, etc., to uplift this sector,” Hardika said.

Quoting numbers to explain various trends, Ashish said, “In the last year, the demand for laptops has grown by almost 54 percent, majorly driven by SMBs.”

He said while this points towards a positive trend, the sector still requires help with respect to “access to technology” and “lifecycle management solutions.”

According to Dinesh, a lot has been done by the government for the MSMEs, but there is a long way to go. 

He emphasised two things for the government to work on — simplification of processes (making everything mobile-first) and segregating the micro-enterprises from the larger pool. 

He added, “About 90 percent of small businesses belong to the micro category. Additionally, their needs are very different compared to the small and medium enterprises.” 

The panellists concluded, saying “formalising the sector” is the need of the hour since it will open a pandora box of resources and credit for them. It will also help them interact better with their customers and increase the existing base.

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Edited by Suman Singh