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Tech-savvy small and medium-sized enterprises (SMEs) created more new jobs and drove more revenue gains over the past three years than SMEs using little technology, according to new research commissioned by Microsoft Corp. and conducted by The Boston Consulting Group (BCG).
The BCG report, Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders, found if more SMEs in India adopted the latest IT tools there is potential for SME revenue to grow by $56 billion and create 1.1 million new jobs.
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The 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. These companies employ the full range of available tools — from productivity software to Internet connectivity and cloud-based services.
“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. “The large informal economy in India means this potential is not always reflected in official statistics, but there is nonetheless a big opportunity for both SMEs and policymakers to increase output and employment substantially,” he added.
Said Karan Bajwa, Managing Director of Microsoft India. “There is 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,” Bajwa added.
Vibhor Jain, Director, Glowmac Lighting Pvt. Ltd. said, “Technology has played a significant role in helping us expand our business. We have seen enhanced efficiencies that have brought visibility into key performance parameters. This has helped us get better control over our operations, reach newer markets and grow our business.”
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.
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