Impact Brief Review Babita Dubey, Ajit Singh Bhatnagar Abstract

Impact of Information,
Communication and Social Business Technology on Micro, Small and Medium-sized Entrepreneurship
in Chhattisgarh: A Brief Review

Babita Dubey,
Ajit Singh Bhatnagar

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Abstract

This
review paper discusses the potential role of the adoption of information,
communication, and technology (ICT) and social business tools based digital
technologies (DT) in micro, small and medium-sized enterprises (MSMEs). Chhattisgarh
is one of the fastest growing states in India and is amongst the richest states
in terms of natural and mineral resources. The State has an excellent
educational ecosystem with Indian Institute of Management, Indian Institute of
Technology, International Institute of Information Technology, National
Institute of Technology, All India Institute of Medical Sciences, National Law
University successfully operational. Micro, Small and Medium-sized Enterprises
(MSMEs) form the backbone of the Indian economy making large contributions to
important economic indicators as well as household
incomes. A literature review
pertaining to ICT and DT initiatives that can support MSMEs was conducted and is
reported here briefly.

Micro, Small and Medium-sized Enterprises

Micro,
Small and Medium-sized Enterprises (MSMEs) form the backbone of the Indian economy
making large contributions to important economic indicators as well as household incomes.
The 2015-16 Annual
report published by the Ministry of Micro, Small and Medium Enterprises
reports that India is home to 51 million MSMEs. The report also states that
MSMEs contributed 37.5 per cent of India’s GDP 1 and 37 per cent of the manufacturing
output 2 underlining
their strategic importance to the Indian economy. Equally important, MSMEs
employed 117 million people that is 14 per cent of India’s working age population 3.

The
Indian economy has emerged as the fastest growing major economy in the world
4. The Government’s Twelfth Five Year Plan includes a vision to lift annual
GDP growth to 8 per cent and to create additional 50 million job opportunities
in the non-farm sector 5. The Plan repeatedly highlights the importance of
Micro, Small and Medium-sized enterprises (MSMEs), skill development and
internet connectivity to achieve these objectives.

Digital
technologies have transformed the landscape in which MSMEs operate. This is led
by consumers going online, especially on mobile. As per the TRAI and BCG-Google
study, India has 1.03 billion mobile subscriptions and 350 million internet
users 6, 7. These users increasingly discover, engage and transact with
businesses online. Digital technologies also offer businesses the ability to
innovate and achieve higher efficiencies through improved communication and
digital productivity tools e.g. Enterprise Resource Planning (ERP) and Customer
Relationship Management (CRM) systems.

Despite significant digital dividends, digital adoption by
Indian MSMEs is extremely low. The report shows that a staggering 68 per cent
of MSMEs in India are completely Offline and only 2 per cent of MSMEs are
digitally engaged 8. It identifies low awareness of the benefits of digital
technologies, lack of digital skills and knowledge, and limited internet
infrastructure as the key reasons for such low uptake.

Given
the importance of MSMEs, the government has launched several initiatives to get
more SMBs to digitize. These include making it easier to access Government
services such as filing taxes, registering businesses online. Additionally,
under the Digital India initiative the government aims to train 10 million
students to raise digital skill levels in India 9. Government actions have
been complemented by the private sector to raise digital awareness and skills
levels among Indian SMBs 10.

Internet
penetration in India is expected to rise to 50-60 per cent by 2020 11. This
trend, coupled with significant digital dividends for MSMEs, could help
increase their contribution to India’s GDP by approximately 10 percentage
points to 46-48 per cent 12. This signifies the huge impact digital could
have on MSMEs as well as on the India growth story.

A study
report by KPMG in India – Google reported the impact of digital technologies
e.g. internet connectivity, websites and e- commerce
on Indian MSMEs. It classified MSMEs based on their levels of digital
engagement into four tiers – Offline, Connected, Enabled and Engaged. Based on
analysis of data from ITOPSTM and a primary telephonic survey by Kantar
IMRB in November 2016 of 504 Indian MSMEs, they found that Indian MSMEs who
adopt digital technologies:

1.        
Grow profits
up to two times faster
than Offline MSMEs.

2.        
Scale across city and country
boundaries. The report finds that 51 per cent of digitally Enabled MSMEs sell
beyond city boundaries as compared to 29 per cent of Offline MSMEs.

3.        
Employ up to five times more
people compared to Offline MSMEs.

Digital India Program

Under
the flagship program of Government of India, Digital India is a program to
prepare India for a knowledge based future. The focus is on being
transformative – to realize. The motto of the program is:  IT (Information Technology) + IT (Indian
Talent) = IT (India Tomorrow). It is coo

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