NEW DELHI: Tech-savvy small and medium-sized enterprises (SMEs) created more newjobs and drove more revenue gains over the past three years than SMEs using little technology, according to researchcommissioned by Microsoft Corp. and independently conducted by the Boston Consulting Group (BCG), a global management consulting firm.
The BCG report - Ahead of the Curve: Lessons on Technology and Growth fromSmall Business Leaders - found if more SMEs in India adopted the latest IT tools there is potential for SME revenue to grow by $56billion and create 1.1 million new jobs.
Karan Bajwa, Managing Director of Microsoft India said that there was a tremendous opportunity for economic growth. "Our objective is to help more SMEs transition to, and benefit from, modern IT. For customers, it means providing product training and helping SMEs understand the full range of available devices and services, but it also means community and industry investments such as skills training," he added.
BCG's research found that over the past three years, IT-enabled SMEs grew revenues 15 per cent faster and created twice as many jobs as SMEs that use less technology.
The research also revealed that across nearly all product categories, these fast-growing SMEs use more Microsoft solutions than any other products, and that SMEs view Microsoft as the top partner for new and future technology needs.
In fact, when asked what technologies survey respondents could not live without, they choseMicrosoft Office as the top productivity application over all others. Moreover, SMEs that adopted Microsoft Cloud services grew faster than SMEs that do not use any Microsoft products. These companies also reported greatly improved employee mobility, scalability and agility, as per the report.
The BCG report argued that the latest wave of technological advancement, such as cloud services, brings potential for the most far-reaching innovation and business growth ever, creating an opportunity for more SMEs to achieve the growth rates of technology leaders by leveraging technology to fuel productivity and growth.
The research revealed that high-performing SMEs stayed ahead of mainstream IT adoption, riding new waves of advancement to improve productivity, connect with new customers and markets, particularly outside their own region or country, and compete with much larger players.
In India and other economies, SMEs play a vital role, often acting as the primary drivers of job and economic growth," said Neeraj Aggarwal, a BCG senior partner and a coauthor of the report.
"There is a big opportunity for both SMEs and policymakers to increase output andemployment substantially. More tech leaders would also help lead to a more vibranteconomy because leaders outperform in innovation," he added.
But at the same time, the research revealed a risk, because SMEs' adoption of IT is decidedly uneven. Across the world, many SMEs, and their customers, don't have access to modern broadband networks, and many lack the skills to get the most out of IT. Many SMEs are also still using large amounts of old and less efficient hardware and software.
New devices are also sometimes very expensive due to high import duties, and SMEs are concerned about online security and privacy. But the growth prospects described in the study are too important for governments and the IT industry to ignore.
The research revealed nearly 90 percent of SMEs in India have no access to the Internet, compared with only 22 percent of SMEs in China and 5 percent of SMEs in the US.
BCG surveyed five major economies- Brazil, India, China, Germany, the United States and found that SME revenue could grow by a combined $770 billion in the five primary countries if more SMEs could achieve the growth rates of those SMEs that use modern IT. These same SMEs could add some 6.2 million new jobs in those countries alone. What's more, BCG believes that this association between IT adoption and growth would be consistent in countries across the world.
