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Digital Empowerment of Businesses Could Inject Up to $216 Bln Into India’s GDP by 2024: Study

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New Delhi (Sputnik): Amid China’s trade tensions with major markets like the US and the UK, India stands on the brink of an industrial revolution. Since the beginning of 2020, American companies like Amazon, Facebook, and Google have made hefty investments in India, aiming to digitise small and medium businesses (SMBs).

With digitally-fuelled small and medium businesses (SMBs), India could add up to $216 billion to its gross domestic product (GDP) in four years, which would be very beneficial for the economic revival of the country in the post-coronavirus era, US-headquartered IT company Cisco has said in a recent report titled “SMB Digital Maturity Study 2020”.

In a bid to distinguish them during a time of tough competition, 68 percent of Indian SMBs are interested in digital transformations. The report, compiled by market research firm International Data Corporation (IDC) and commissioned by Cisco, is based on a survey of companies across the Asia-Pacific region (APAC).

Cloud technology, which is the delivery of different kinds of services via the internet, has emerged as a top priority for SMBs, followed by security and adoption of newer information technology (IT) software.

Citing respondents, the report said a shortage of digital skills and lack of required technologies are causing small businesses major issues in their effort to further digitise their operations.

It is noteworthy that the issue of a shortage of digitally-skilled people is still a barrier for SMBs in India, when tech giants including Microsoft and Amazon have been ramping up their advanced tech training programmes in the country – not just with tech-savvy millennials, but also with government employees.

Many national and international companies have launched special programmes in India, training people in Artificial Intelligence (AI), Machine Learning (ML), Cloud, and Blockchain, among other things.

The Cisco report, however, also noted that more and more companies from the APAC region are entering the arena of digitisation.

Currently, 16 percent of SMBs in the APAC region are now in the advanced digital maturity stage, as compared to last year, when the percentage was 11. In addition, over 50 percent of SMBs have become entered the “Digital Observer” stage, where they are acquiring knowledge about newer technologies.

At present, only 31 percent of SMBs in the APAC region remain sluggish in their digital growth.

“Given the rapidly changing market conditions and speed of technology evolution, SMBs should work with the right industry partners to ensure they can maximise their technology investments and thrive in their digitalisation journeys", said Daniel-Zoe Jimenez, AVP, Head Digital Transformation and SMB research at the International Data Corporation (IDC). IDC is a market research firm and was also an active participant in the Cisco report.

According to India’s apex industry body NASSCOM, the nation has an estimated 42.5 million registered and unregistered SMBs that make up nearly 95 percent of the total industrial units in the country. It is only natural that the digitisation of these companies is directly linked to the overall industrial progress of the nation.

In January 2020, Amazon CEO Jeff Bezos landed in India to be part of an event called “SMBhav”, where he emphasised the importance of digitising SMBs in the country. While Bezos announced an investment of $1 billion to digitise Indian SMBs, he also revealed that Amazon would be exporting $10 billion worth of “Made in India” goods across the world to give Indian vendors a way to go global.

In April, Facebook invested $5.7 billion in Indian telco Reliance Jio aiming to digitally empower domestic businesses in India.

Later in July, Google CEO Sundar Pichai announced a hefty investment of $10 billion as part of a special “Digitisation Fund” set up by his company for India.


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