SME’s Can Create More Jobs & Revenue With IT Tools

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Today at an event in New Delhi, Microsoft Corpoartion released a research study conducted by The Boston Consulting Group (BCG), a global management consulting firm and a leading adviser on business strategy.

From L-R - Karan Bajwa, Managing Director of Microsoft India & Neeraj Aggarwal, a BCG senior partner unveiling the report

As per BCG report titled Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders , tech-savvy small and medium-sized enterprises (SMEs) created more new jobs and drove more revenue gains over the past three years than SMEs using little technology. This report further revealed that a there is tremendous scope in India for SME to grow their revenue by $ 56 billion and create 1.1 million new jobs, provided they adopt the latest IT tools for their businesses.

To prepare this report, BCG surveyed five major economies- Brazil, India, China, Germany, the United States and found that SME revenue could grow by a combined $770 billion in the five primary countries if more SMEs could achieve the growth rates of those SMEs that use modern IT. These same SMEs could add some 6.2 million new jobs in those countries alone. What’s more, BCG believes that this association between IT adoption and growth would be consistent in countries across the world.

“SMEs are a critical growth engine for jobs and economies today,” said Karan Bajwa, Managing Director of Microsoft India. “There is tremendous opportunity for economic growth. Our objective is to help more SMEs transition to, and benefit from, modern IT. For customers, it means providing product training and helping SMEs understand the full range of available devices and services, but it also means community and industry investments such as skills training,” Bajwa added.

BCG’s research found that over the past three years, IT-enabled SMEs, which BCG refers to as “technology leaders”, grew revenues 15 percentage points faster and created twice as many jobs as SMEs that use less technology. The research also revealed that across nearly all product categories, these fast-growing SMEs use more Microsoft solutions than any other products, and that SMEs view Microsoft as the top partner for new and future technology needs. In fact, when asked what technologies survey respondents could not live without, they chose Microsoft Office as the top productivity application over all others. Moreover, SMEs that adopted Microsoft Cloud services grew faster than SMEs that do not use any Microsoft products.

The BCG report argued that the latest wave of technological advancement, such as cloud services, brings potential for the most far-reaching innovation and business growth ever, creating an opportunity for more SMEs to achieve the growth rates of technology leaders by leveraging technology to fuel productivity and growth. 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, particularly outside their own region or country, and compete with much larger players.

But at the same time, the research revealed a risk, because SMEs’ adoption of IT is decidedly uneven. Across the world, many SMEs, and their customers, don’t have access to modern broadband networks, and many lack the skills to get the most out of IT. Many SMEs are also still using large amounts of old and less efficient hardware and software. New devices are also sometimes very expensive due to high import duties, and SMEs are concerned about online security and privacy.

The research revealed nearly 90 percent of SMEs in India have no access to the Internet, compared with only 22 percent of SMEs in China and 5 percent of SMEs in the US.

The risk of a growing technology gulf is relevant to governments looking to maximize economic growth, and it is an opportunity for policymakers and the IT industry to implement strategies to remove barriers to IT adoption by addressing small businesses’ top concerns about using more technology.

Microsoft has realised the potential of SME’s and their difficulties in adopting the latest technologies and they are working aggressively with SMEs with different skill programmes and training and further details about this can be found at http://www.microsoft.com/en-us/news/presskits/SMETechLeaders/default.aspx

This study should be eye-openers for the Indian government, small & medium business and all IT companies of India.

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