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The Internet is becoming increasingly intrinsic to people’s lives in developing markets around the world. In India, where Internet penetration, while accelerating, is currently less than 18 percent, there is still a lot of ground to cover. Even with this currently small penetration in the marketplace, the Internet is disrupting business models and giving rise to a new generation of startups.

India has the world’s second largest base of small and medium-sized enterprises (SMEs), but many have yet to fully embrace the Internet as a means of transforming their business to better meet evolving customer demands in today’s always-on world.

SMEs in India cumulatively account for almost nine percent of national GDP, 95 percent of its industrial units, 45 percent of its manufactured production, 40 percent of its exports, and provide 69 mil¬lion jobs. But the majority of small businesses in India don’t even have a website. According to a study by advisory firm Zinnov, India is home to around 50 million SMEs, of which only 20 percent (about 10 million) are considered technology-ready – just 500,000 have a website and two million have access to Internet.

By its sheer size and diversity of industries and services, India’s SME sector has remarkable potential to lead the charge for the Internet in India, but a low level of awareness of its benefits coupled with significant challenges around connectivity, bandwidth, security and privacy issues have constrained adoption of the latest IT and digital technologies. What is encouraging, however, is this scenario is changing, albeit slowly. SMEs in India are slowly stepping away from their traditional pen and paper business culture – and becoming more tech-savvy.