By Akash Gehani
Technology for MSMEs: More than 6.33 billion businesses make up India’s MSME sector, employing over 11 billion people. Nearly 30 per cent of the nominal GDP of the nation is contributed by this industry, which has been expanding at a CAGR of 18.5 per cent. The work doesn’t end with MSMEs building digital assets such as the e-commerce website, setup banking and payments, and conducting online transactions. Post the initial setup, they must make sure that their digital assets are secure from cyberattacks. This can be a technical and challenging process. MSMEs need to increase their understanding of cyber security, its implications and integration for the same. To stay competitive on a global scale, MSMEs must step up their cyber security procedures effectively.
With the need to adhere to the new cybersecurity regulations from the Indian Computer Emergency Team (CERT-In), MSMEs must report security incidents within six hours of detection. They mandate that virtual private network (VPN) companies track user data and hand it over to the authorities upon request. Indian MSMEs have requested additional time to adhere to the new regulations as they are not equipped for such a rapid change given the difficulties of tech integration, especially for nano and small businesses. The majority of problems MSMEs face can be attributed to a lack of resources and technological expertise.
Small firms are believed to face a variety of consequences from cyberattacks, including financial, psychological, and emotional ones, adding to the risks they already assumed when they began doing business online. Small businesses are frequently targeted by phishing, ransomware, password-theft assaults, man-in-the-middle attacks, denial-of-service attacks, DNS attacks, and advanced persistent threats (APT). Gaining knowledge, maintaining hardware, using smart passwords, and updating and inspecting systems frequently are a few strategies to safeguard a company from cyberattacks.
MSMEs also commonly experience capital constraints as a result of limited access to funding. As a result, the technological base is shaky, which results in low-quality production. Because of this loop, people fear learning about digital technologies. Without tech-savvy and experienced employees, a company will not be able to apply sound digital marketing concepts to achieve profitable results.
These factors make it challenging for MSMEs to develop, expand, and become well-known. Individuals who oppose technology and are reluctant to spend more money on more expensive but useful digital equipment frequently don’t know how to use it or what its benefits are.
One must constantly update their products and stay in sync with trends to boost sales in the digital market. For this, innovation is crucial because we’re all looking for something that will set us apart. Technologies like AI/ML, IoT, and data intelligence, which can assist small businesses give customers a better experience and build an online presence, can be very beneficial to them. These digital technologies enable small enterprises to compete with major company leaders easily.
The Ministry of MSMEs provides learning programmes and plans to help MSMEs adapt to evolving digital technologies. Further, one can take up learning programs with government and private providers and also sign up on the Udyam website to learn about the beneficial policies that the government provides. In the recent past, we witness that traditional businesses are open and upskilling to use digital technology, as they become more aware of its benefits. Among the steps that will help MSMEs and DTCs, here are key things that the government should focus on to support these businesses:
Convenience of online and offline sales of policies
According to industry statistics, the MSME sector contracted by 46 per cent during the first Covid-19 lockdown in 2020 and losses totalled 11 per cent during the second lockdown. Government measures to stop similar losses going forward will aid in the survival and expansion of MSMEs in India. Small DTC owners will be more independent and in charge of their commercial business operations with a strategic and comprehensive framework to support e-commerce for SMEs. Even commercial revenues will increase as a result the same.
Boost global e-commerce prospects for SMEs
Small DTC brands have few options for marketing outside of India. The traditional method is equally laborious and difficult. To encourage e-commerce for SMEs, the government must design comprehensive foreign trade coverage. Small DTC businesses will find it easier to enter new markets by reducing compliance requirements and easing off on the tactics. It will even help Indian products gain more international exposure.
Provide SMEs with digital training
Beyond tier 1 markets, the government needs to step up capacity-building and training initiatives. It is becoming clearer that technology will be essential in determining the success and competitiveness of India’s MSMEs both domestically and internationally in the next years. The corporate transformation in 2022 will be driven by technologies like Fintech APIs, full-stack data platforms, specialised machine learning solutions, and advertising optimization. The digitalization of MSMEs should therefore be given top importance.
Developing e-commerce-related infrastructure and logistics
The MSMEs will now benefit from new additions to a massive infrastructure project announced in the union budget for 2022. The PM Gati Shakti Masterplan will now assist in facilitating the flow of products and passengers, particularly in rural regions, and will assist in enhancing inter-modal connectivity. Such guidelines were required to guarantee that more SMEs could participate in online sales. Small DTC companies will have a nurturing foundation thanks to improved delivery and infrastructure as well as the necessary virtual skilling.
With structured e-commerce shipping and courier partners, consumers would be able to buy and sell online even in remote areas of the country as the infrastructure grows. For most MSMEs in India, e-commerce has been an opportunity rather than a challenge. And in the upcoming years, this trend is predicted to accelerate.
Akash Gehani is the Co-Founder and COO of Instamojo. Views expressed are the author’s own.