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India to benefit from SMEs deploying IT: study

Increase in adoption of IT by SMEs can add $56 bn to economic output and create over a million jobs, says a Microsoft-BCG study

Nearly 90% of SMEs in India have no access to the Internet, compared with only 22% of SMEs in China and 5% in the US, said the study. 

New Delhi: An increase in the adoption of technology by small and medium enterprises (SMEs) in India can add $56 billion to the country’s economic output and create more than one million additional jobs, said a Microsoft-Boston Consulting Group (BCG) study released on Tuesday.

Nearly 90% of SMEs in India have no access to the Internet, compared with only 22% of SMEs in China and 5% in the US, said the study.

Around 750 SMEs surveyed of the total 4,000 were from India.

“The leaders in technology adoption across industry sectors were successful in increasing their annual revenue 15 percentage points faster than companies with lower level of technology adoption,” the report said. “They also created jobs almost twice as fast as other small businesses.”

BCG estimates SMEs’ revenue could grow by a combined $770 billion in just five primary countries surveyed, if they deployed more IT tools.

“India still has to go a long way when it comes to technology adoption in SMEs. However, among technology leaders in India, 80% of them are using cloud technology, as against 60% of technology leaders in developed countries, which is a positive sign for India,” said Meetul Patel, Microsoft Corp.’s general manager of Small and Mid-Market Solutions and Partners.

China ranks the highest among the countries surveyed with SMEs contributing 75% to the formal workforce and 60% to the country’s GDP.

An estimated additional 55% of India’s GDP and 57% of its labour force comprises small businesses operating beyond the reach of official government statistics according to the international labour office, the report said.