Tech-savvy enterprises create more jobs, drive revenue

Increasing use of information technology (IT) tools has enabled small and medium enterprises (SMEs) in diverse sectors to create more jobs and shore up revenues during the past three years, a research report said.

"IT-enabled SMEs doubled hiring and grew revenues 15 percent more than their non-IT counterparts. Microsoft Office emerged as the preferred application for enhancing productivity. Adoption of Microsoft Cloud services also enabled them to improve employee mobility, scalability and agility," the report pointed out.

The research, commissioned by global software major Microsoft Corporation and management consulting firm Boston Consulting Group (BCG), found that if more SMEs adopted the latest IT tools the sector could grow by $56 billion, and generate a whopping 1.1 million jobs across the country.

"As SMEs are a critical growth engine for jobs and productivity, there is a huge opportunity to spur growth. Our mission is to help them adopt modern IT tools and benefit," Microsoft India managing director Karan Bajwa said, citing the report - "Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders".

With customised products and services, Microsoft helps SMEs grow, compete and become profitable through effective use of office tools, cloud-based services and mobile technology.

"Along with our partners, we have designed several programmes to help SMEs transform their business. For instance, cloud services enable innovation and create an opportunity to achieve the growth rates of technology leaders," Microsoft general manager for small and mid-market solutions Meetul Patel observed.

The research revealed that high-performing SMEs stayed ahead of mainstream IT adoption, riding new waves of advancement to improve productivity, connect with new customers and markets, especially outside their region or country and compete with larger players.

"SMEs play a vital role, acting as primary drivers of job and economic growth. The large informal economy in India means this potential is not reflected in official statistics, but there is a big opportunity for both SMEs and policymakers to increase output and employment substantially," BCG partner and report's co-author Neeraj Aggarwal said.

High-performing SMEs employ a range of tools from productivity software to internet connectivity and cloud-based services.

"Technology has played a significant role in helping us expand our business. We have seen enhanced efficiencies that brought visibility into key performance parameters. It has also helped us get better control over our operations, reach newer markets and grow our business," Glowmac Lighting Ltd director Vibhor Jain, an SME entrepreneur, noted.

On the flip side, the research also revealed that adoption of IT by SMEs is uneven the world over as many of them and their customers don't have access to modern broadband networks and lack skills to get the most out of IT.

"Many SMEs still use old and less efficient hardware and software. About 90 percent of them in India do not have access to internet compared to 22 percent of their counterparts in China and five percent in the US. New devices are expensive due to high import duties. They are also concerned about online security and privacy," the report highlighted.

As the risk of a growing technology gap should worry governments looking to maximise economic growth, policymakers and the IT industry should implement strategies to remove barriers to IT adoption by addressing small businesses' concerns.

The research, which surveyed Brazil, India, China, Germany and the US, found that SME revenue could grow by a combined $770 billion in these five countries if more SMEs could achieve growth rates of those SMEs that use modern IT.

"These SMEs could add around 6.2 million new jobs in the five countries surveyed. The association between IT adoption and growth will be consistent in countries across the world," the report affirmed.

Though the survey of over 4,000 SMEs in five of the world's largest and most diverse economies were consistent across industry sectors, there were surprises from emerging markets and with women-owned firms.

"Technology leaders in emerging markets grew jobs and revenue faster than in developed markets and are quicker than their developed market counterparts to embrace new tools and woman-owned firms are among the most technically advanced, innovative and successful firms interviewed," the report added.