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February - 2015 - issue > CXO View Point

Technology & SMEs - Time to Gain a Competitive Edge

By Dinesh Agarwal, Founder & CEO, IndiaMART
Monday, February 9, 2015
By Dinesh Agarwal, Founder & CEO, IndiaMART
IndiaMART is a 1996 founded online B2B marketplace that matches buyers and suppliers.
Technology adoption is regarded as the catalyst for the growth of any economy, and is a critical pillar to meet the strategic objectives of various businesses. Globally, various countries are technologically superior, and are strongly driving growth on the basis of innovation. European companies, specifically German companies, are quite robust and their success is based on the strength and flexibility of their SMEs, which are responsible for contributing around 60-70 percent of their economic output. Chinese SMEs, with an internet adoption rate of 20-25 percent, contribute to about 70 percent of the country's GDP. India, too, is on a fast growth track.

Responsible for encouraging national and international trade, and providing employment to over 40 percent of India's population, it is no longer a secret that SMEs are one of the most powerful growth engines of the economy. However, due to their low scale and poor adoption of technology, their contribution to the country's GDP is only limited to 17 percent. Technology-equipped SMEs can fuel the growth of the economy beyond expectations. However, what really hinders its use in their business is perhaps its lack of availability, unreasonably high costs, absence of skilled labour to harness the power of technology and much more.

In the last few years, where on one hand, start-ups were on an incessable hunt for technology to advance their businesses; traditional SMEs on the other hand, were still in the process of breaking out of their cocoons, where technology adoption is concerned. We have now started witnessing a higher level of internet penetration, along with an unprecedented mobile internet revolution. Currently, there are approx. 173 million mobile internet users in India.

2015 has begun with a new promise of 'Make in India', giving a big spur to the manufacturing sector. An increased level of confidence has been seen amongst the SMEs. The SME Sentiment Survey conducted by IndiaMART in October 2014 revealed that 54 percent of these businesses were optimistic about the new government fostering an environment to boost positive growth in the country.

Use of complex technologies to make businesses simpler

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