Indian MSMEs planning to step up technology investment, hiring ahead despite third wave fear
Technology for MSMEs: Digital adoption has assumed greater significance for MSMEs in the post-Covid world as consumers gradually shift to online channels for the purchase of goods and services.
Technology for MSMEs: Covid-hit micro, small, and medium enterprises (MSMEs), which had braved the first and second waves of the pandemic, are looking to step up investment in digital technology along with hiring more people this year and would continue the momentum next year as well, one of the top executives at data analytics and consulting firm Kantar told Financial Express Online in an interaction. While every one out of four MSMEs was looking to increase its employee strength during 2020 but it took a back seat due to Covid. However, towards the end of 2020, at least one out of three MSMEs was looking to increase its staff for the next year and this would continue in the coming year as well, according to Indranil Dutta, Associate Vice President, Insights Division, Kantar.
“Also, while their (MSMEs) investment in digital technology may not be significant in comparison to pre-Covid period, but we may see at least one-third of MSMEs investing in technology by end of this year and next year as well vis-a-vis only 20 per cent looking at technology-related investments in 2019. We will see this trend continue irrespective of whether there is a third wave or not. There won’t be a U-turn in using digital advertisement. Digital will continue to grow,” said Dutta.
Digital adoption has assumed greater significance for MSMEs in the post-Covid world as consumers gradually shift to online channels for the purchase of goods and services. According to a post-Covid 2020 study by Cisco surveying 1,424 small and medium enterprises in the Asia Pacific region, India was ranked ninth in terms of the Asia Pacific SMB digital maturity ranking. However, 68 per cent of Indian SMBs sought to digitally transform to introduce new products and services, differentiate themselves from the competition, and grow, while 60 per cent recognized that competition is transforming and they must keep pace.
Kantar had also noted in its recent annual ITOPS study for 2020, covering 7,000 MSMEs in 35 cities, that nearly 40 per cent of the MSMEs in 2020, as compared to 34 per cent in the previous year, looked towards launching new products and services in the coming year. Also, around 25 per cent of MSMEs in 2019 were looking to increase their employee strength in 2020. The plan was later shelved due to Covid as many MSMEs had let their employees go. However, as per the latest ITOPS data, hiring is one of the major business plans now for every one out of three MSMEs in India. Likewise, in comparison to just 15 per cent MSMEs in 2019 looking to upgrade technology and around two out of 10 businesses wanting to focus on their digital presence, almost one-fourth of MSMEs now have planned to upgrade technology and three out of 10 have planned to focus on their digital presence with activities like selling, marketing online, etc.
“Businesses that went into the shell post first-Covid wave are now trying out new things and would continue to do that with a mindset change that Covid is here to stay for a much longer period than expected. So, playing safe would be risky. MSMEs no longer want to play safe except few of them and are willing to invest in many things despite the current situation. If there is a long lockdown post third wave, which seems unlikely, where businesses are forced to shut down for quite some time, then that may be a challenging factor for their growth ahead. Still, they won’t be going to back the first wave era,” Dutta added.