We'll look at how technological solutions might assist MSMEs to become more competitive.
As we all know COVID-19 has turned out to be the reason for disruption for a lot of businesses across many sectors in India and now things are gradually getting back to normal. The MSME sector got the most brutal hit, due to the limitations in technology, capital, and scalability. Micro, Small, and Medium Enterprises (MSMEs) play a critical part in every economy and are often the backbone of development and inclusive growth. They are equally important for promoting entrepreneurship as they provide opportunities for new entrepreneurs to start and grow their businesses. However, in recent years the MSMEs have been facing increased competition from large corporations and foreign companies. To stay competitive, MSMEs need to embrace new technologies and adopt innovative business models in the urge of growing and facing such pandemics in future. Technology has emerged as a lifeline for every enterprise, more so in recent times since the push to go digital has been on rise. Here, we'll look at how technological solutions might assist MSMEs to become more competitive.
Micro, Small, and Medium Enterprises (MSMEs) are the reason behind the encouragement of employment generation, promoting entrepreneurship, and the development of the country's infrastructure. Still, they struggle to have access to wide markets and unique challenges are yet to overcome.
One of the biggest challenges faced by MSMEs is access to capital. Because they are often seen as high-risk investments, MSMEs often have difficulty securing loans and other forms of funding. This can make it difficult for them to expand their businesses or invest in new technologies.
Another challenge faced by MSMEs is regulatory compliance. Due to their size, MSMEs are often subject to more stringent regulations as compared to larger businesses. This can make it costly and time-consuming for them to comply with all the necessary rules and regulations.
A Google-KPMG study revealed that for digitally-enhanced SMEs, revenue growth estimates are twice as high compared to those for traditional small businesses. Tech firms enable SMEs to plan and manage logistics and develop cross-departmental processes while enhancing collaboration, execution, and profitability using cutting-edge technology and subject expertise.
The ongoing global pandemic has given a tough time for small businesses across the world. Many have been forced to close their businesses due to the economic downturn. Nevertheless, even in the face of adversity, there are always those who find a way to adapt and thrive. In recent years, technology has become increasingly important in all aspects of the business. This is especially true for small and medium-sized businesses (SMEs), which often lack the resources of larger companies. A tech-based solution can level up their operations and give SMEs the tools they need to compete. There are numerous reasons why tech-based solutions are important for SMEs. They can help businesses save time and money, improve communication and collaboration, and even increase sales. In a world where technology is constantly evolving, it's essential for businesses to keep up with the latest trends and technologies. A tech-based solution can help SMEs to achieve new possibilities and reach a bigger consumer base.
Tech-Based Solutions to Increase MSME Competitiveness
The competitiveness of MSMEs is essential for supporting inclusive economic growth and development of a country. In a globalized economy, MSMEs face challenges in accessing markets, financing, and technology. Here are some of the perks of tech-based solutions that can help MSME to grow:
1. Artificial Intelligence- The AI programme can assist in performance evaluation and teaches salesmen how to speak more like savvy business people. SMEs can scale up their customer engagement and experience via automated chat platforms, freeing up staff for other crucial client engagements.
2. Machine Learning- Machine learning is helping young and growing enterprises with predictive analytics. Also, machine learning can sieve through huge data chunks and uses its predictive algorithms to aid business decision-making.
3. Augmented Reality- AR helps the MSMEs to increase their sales and helps the marketing team to promote the products. AR technology helps humans in depicting objects that are more real. This will be more useful for MSME companies that are engaged in architecture, construction, art, wearables business and more. This will lead the companies to work more optimally and minimize errors thanks to a more realistic depiction.
4. Internet of Things- IoT can help to automate and streamline tedious, repetitive tasks such as delegation, scheduling, reporting, and more can be taken care of by IoT devices or solutions. IoT offers smart metering and lighting solutions that can help to save on utilities by streamlining energy consumption and allowing remote monitoring. SMEs can also manage the idle time for office equipment and machines, automatically turning them off when not in use even from a distance just with the help of an app. This helps the MSMEs to achieve smart savings and go for a greener planet.
5. Data Analytics- It helps the MSME to create a Data centric approach to business. Data analytics provide insights that illustrate a complete business overview, eliminating the need to make decisions based only on guesswork and what others do, allowing companies to act according to their businesses and clients’ needs.
6. Information Technology-Information Technology plays an essential role in escalating the profitability of organizations. It also gives rise to competitiveness among the Small and Medium Enterprises (SMEs) making them think about the research and development along with the availability of the latest technology. IT is a mechanism, which enables SMEs to respond to customers’ complaints and requirements efficiently by enabling information to be transmitted through various mediums including emails, telephonic, and social media channels.
Today, every industry understands the importance of digital adoption and how it can help them to survive in scenarios like COVID-19. The role of technology-based solutions to increase MSME competitiveness and lately the MSME has recognized its importance. It is evident that the rise of digital tools and platforms is crucial in improving productivity, lowering costs and expanding market reach for small businesses. However, there is a lack of understanding of how these solutions can be used to increase MSME competitiveness. In addition, organizations that can assist small and medium-sized businesses in realizing their full potential should be on the radar of these companies.
- The author is Global Co-Founder and CEO of Hirect India