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The digitisation of small and medium businesses (SMBs) could add $158 to $216 billion to India’s gross domestic product (GDP) by 2024 and contribute to the country’s economic recovery post-Covid-19, according to the Cisco India SMB Digital Maturity Study 2020.
The study, based on a survey of SMBs from across the Asia Pacific region conducted by IDC and commissioned by Cisco, shows that SMBs that are more digitally mature enjoy twice as many benefits in terms of revenue and productivity compared to those that adopt an indifferent approach to digitisation.
The study highlights that 68 per cent of Indian SMBs will push new products and services on their digital platforms in order to grow and differentiate themselves from competition. While 60 per cent recognise that competition is transforming and they must keep pace, 50 per cent seek digital transformation due to customer demand for change.
Commenting on the report, Panish PK, Managing Director, SMB, Cisco India and SAARC, said in the official release: “During this time, small businesses have been grappling with drastically reduced liquidity, disrupted supply chains, and lending challenges. To bounce back, they need to pivot and adapt swiftly, reimagine their business models, and identify their place and role in the new normal.”
He added: “In these efforts, most small businesses have realised that going digital is critical and are displaying a willingness to disrupt themselves. At Cisco, we understand the complex world of SMBs, and have been innovating products aimed at helping small and medium-sized businesses digitise quickly and sustainably.”
The results of the study show that cloud, a foundational pillar for digitisation, is the top technology investment priority for SMBs in India (16 per cent), followed by security (13 per cent) and purchase or upgrade of IT infrastructure software (12 per cent).
However, SMBs are also facing challenges on this front. According to the respondents, a shortage of digital skills and access to talent, besides lack of necessary technologies are the top hurdles for SMBs in their digital transformation efforts (16 per cent each).
In the Asia Pacific region in general, SMBs continue to make progress in their digitisation journeys, despite challenges.
According to the study, 16 per cent of SMBs in the region are now in advanced digital maturity stages (3 and 4), compared to 11 per cent in 2019. Slightly more than half of SMBs have embraced digitisation to become Digital Observers (stage 2). Only 31 per cent of SMBs are still reactive to market changes and have hardly made any efforts to transform digitally (stage 1).
The 2020 Asia Pacific SMB Digital Maturity Study analysed data from over 1,400 SMBs across 14 markets in APAC, including Australia, China, Hong Kong, and India, among others. This has been carried out to assess the challenges and opportunities the companies face in their digital transformation journey.
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