In the small and medium enterprise (SME) space in India, a moderate upgrade in the use of technology can not only grow these businesses faster but create a huge number of jobs.

This has been found in a recent study done on the global SME sector for Microsoft by the Boston Consulting Group (BCG). It found that in the SME sector 40 per cent of the businesses embrace latest technology, including the use of Cloud services. These were termed “leaders”. Next came the "followers”, another 40 per cent. These had an online presence, a domain name and a web presence but none of them uses cloud services.

Of the remaining 20 per cent, classified “laggards”, very few had a domain name and no web presence for their companies. They might be using a computer but for accounting or other purposes.

Discussing the impact of the BCG study, commissioned by Microsoft, with Business Line at a DWEN (Dell Women’s Entrepreneur Network) conference held in Austin last week, Cheryl Kelly, General Manager of Worldwide Small Business Marketing, Microsoft, said the study found that even if you can get 15 per cent of the “followers” and 30 per cent of the “laggards” in the SME segment to catch up with the leaders and use better technological tools such as cloud services, they could potentially boost their revenues and global economy by a whopping $770 billion and create an additional 6 millions jobs worldwide.

Now $770 billion is roughly the annual GDP of the Netherlands. And 6 million is the population of Denmark!

Kelly said that the study also found that the companies of the technology leaders, particularly those who embrace the cloud, are growing about 15 per cent faster and create new jobs at double the rate compared to others.

“So there is a rough co-relation between technology, business growth and creation of new jobs," she added.

Impact on Indian SME sector

Coming to India, Kelly said that if the non-tech savvy small and medium businesses moved to tech upgrades, it would have an impact of $56 billion for India. And, an additional one million jobs could be created.

“We found that if India just brought 15 per cent of the laggards to the level of technology leaders, this change could happen.”

Interestingly, again in India, women heading companies, even though in a minority, are 1.5 times more likely to be technology leaders, she added.

Also, companies that are smart enough to use cloud, which gives access to quality services till now reserved only for big players thanks to the cost, are likely to expand faster and defy geographical boundaries, and that without substantial investment. The technology allows them to have not only international customers (estimated six times more) but also international employees – 24 times more.

It is the 15 per cent annual growth rate – mapped over the last three years – in their businesses, that has enthused over 80 per cent of technology adoption leaders in SME to use cloud services. The use of cloud has allowed such businesses to escape the cost of installing and maintaining significant hardware and software for server operations. So the upfront cost is saved and companies have to pay only for what they use.

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