Digitalisation of SMBs could add up to $216 billion to India's GDP by 2024

The digitalisation of small and medium businesses (SMBs) could add $158 to $216 billion to India's GDP by 2024 and contribute to the country's post-pandemic economic recovery, according to the Cisco India SMB Digital Maturity Study 2020.

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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 have an indifferent approach to digitalisation.

The study highlights that 68% of Indian SMBs seek to digitally transform to introduce new products and services, differentiate themselves from the competition, and grow, while 60% recognise that competition is transforming and they must keep pace, and 50% seek digital transformation due to customer demand for change.

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"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. In these efforts, most small businesses have realized that going digital is critical and are displaying a willingness to disrupt themselves," said Panish PK, Managing Director, SMB, Cisco India and SAARC, in a press statement.

The results of the study show that cloud, a foundational pillar for digitalisation, is the top technology investment priority for SMBs in India (16 percent), followed by security (13 percent) and purchase or upgrade of IT infrastructure software (12 per cent).

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However, SMBs are also facing challenges on this front. According to the respondents, a shortage of digital skills and access to talent, and lack of necessary technologies are the top hurdles for SMBs in their digital transformation efforts (16 per cent each).

"For us at Cisco, small businesses are a top focus area. To help address their challenge of talent, our Networking Academy has so far trained more than 182,000 students across India in FY20. And to accelerate their digitisation efforts, our aim is to provide small businesses access to a suite of simple, secure, and smart enterprise-class technologies, specifically tailored to their evolving needs," Panish added.

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"Digitalization is no longer an option for SMBs – it's a matter of survival. Covid-19 has forced them to move to digital-first, becoming more dependent on technologies to ensure business continuity and resiliency. As SMBs rethink processes, operations and customer engagements, they are looking at cloud services and cybersecurity first, but also have increased their focus on customer experience, video conferencing and AI/Analytics solutions," said Daniel-Zoe Jimenez, AVP, Head Digital Transformation & SMB research at IDC.