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Technology Adoption: A Weak link for Indian SME's

By SiliconIndia     
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Bangalore: Technology is the backbone of modern business. But Indian Small and Medium Enterprises (SMEs) in India lag behind in the adoption of technology and this proves to be roadblock in the path of catching up with their global counterparts.



India, according to a report by Pluggd.in, has the second largest population of SMEs among BRIC and the US. This has not gone unnoticed by IT vendors, who seek to tap the potential that India’s SMEs hold.



The provision of Software-as-a-Service (SaaS), for example, has allowed firms such as TravelCarma, (a travel firm based in Gujarat) to extend its services in Frankfurt. A report from the Business Standard noted that while SaaS as a platform for delivering applications has been around for quite a while now, SMEs have only started to realize its true potential after the recession, because of the service’s cost-effectiveness.



However, while a number of software product SMEs are benefitting from the interest of multi-national corporations and IT firms from all over the world, many new players hesitate to take up new technology is due to the lack of awareness, and majority of those who are aware step back because of their nervousness to embrace the new technologies.



Although SMEs provide employment to about 75percent of India’s workforce, these enterprises spend only 30 percent of the country’s IT spending. These statistics from Pluggd.in are only made more shocking with the fact that only 12 percent of Indian SMEs use computers and 90percent of them use it just for document processing. A major change in this attitude will help the SME’s to a huge extent in competing globally.



Some of the main reasons behind Indian SMEs avoiding the adoption of technology include budget and infrastructure limitations. The shortage of skilled labor that has the basic know-how to work computers is another looming problem for SMEs from upcoming cities.



The government seems more than eager to help SMEs change their perception of technology though. In a Seminar on “Information, Communication & Technology for Enhancing Competitiveness of Indian SMEs”, organized by PHD (Punjab Haryana Delhi) Chamber in New Delhi, Dr Ajay Kumar, the Joint Secretary of the Department of IT in the Ministry of Information and Technology, Government of India, said “Information Technology is a tool which enables you to innovate and make a difference. IT enables better information use and better information management”.



However, the government is yet to encourage SMEs in the adoption of new technologies by promoting low-cost technology solutions that are designed specifically for SMEs. A few other steps that would encourage SMEs in this regard would be the provision of opportunities, as well as the implementation of a culture of innovation, especially in the fields of marketing.


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