Ever since the onset of the financial crisis, the global economy has been struggling to revive itself and achieve a healthy growth rate. The global growth rate for 2017-18 and 2018-19 are projected at 3.40% and 3.80%.
But compared to this, India’s GDP continues to grow at a fast pace, outstripping major world economies. According to IMF, India is projected to grow at 7.80% for this fiscal year.
Without any dispute, SMEs are one of the key drivers behind this growth story. This sector, comprising of manufacturing, infrastructure, service industry, food processing, packaging, chemicals, and IT, has emerged as the most vibrant and dynamic engine of growth of Indian economy over the past two decades.
These self-funded proprietary firms, private co-operatives, private self-help groups, Khadi, and Village and Coir industries, not only provide huge employment opportunities but also ensure regional balance by taking industrialisation to rural and backward areas (about 20% of MSMEs operate out of rural & backward areas – CII)
To communicate the importance of the SME sector, I am sharing with you some key SME statistics, trends and reports.
Comprehending the sector’s contribution towards employment numbers, towards GDP, innovation and entrepreneurship, the Government of India has launched numerous initiatives to further the cause of SMEs. Mentioned below, in a table form, are the performances of some of the key schemes:
For SMEs in developing countries e-commerce poses the advantages of reduced information search costs and transactions costs (i.e., improving efficiency of operations-reducing time for payment, credit processing, and the like). Surveys show that information on the following is most valuable to SMEs: customers and markets, product design, process technology, and financing source and terms. The Internet and other ICTs facilitate access to this information.
In addition, the Internet allows automatic packaging and distribution of information (including customized information) to specific target groups.
However, there is doubt regarding whether there is enough information on the Web that is relevant and valuable for the average SME in a developing country that would make investment in Internet access feasible.
Underlying this is the fact that most SMEs in developing countries cater to local markets and therefore rely heavily on local content and information. For this reason, there is a need to substantially increase the amount and quality of local content (including local language content) on the Internet to make it useful especially to low-income entrepreneurs, eMarketer estimates that SME e-business revenues will increase: from $6.53 billion to $28.53 billion in Eastern Europe, Africa and the Middle East combined; $127.25 billion in 2003 to $502.69 billion by 2005 in the Asia-Pacific region; $23.51 billion in 2003 to $89.81 billion by 2005 in Latin America; from $340.41 billion in 2003 to $971.47 billion by 2005 in Western Europe; and from $384.36 billion in 2003 to $1.18 trillion by 2005 in Northern.
There are at least five ways by which the Internet and e-commerce are useful for developing country entrepreneurs:
1. It facilitates the access of artisans47 and SMEs to world markets.
2. It facilitates the promotion and development of tourism of developing countries in a global scale.
3. It facilitates the marketing of agricultural and tropical products in the global market.
4. It provides avenues for firms in poorer countries to enter into B2B and B2G supply chains.
5. It assists service-providing enterprises in developing countries by allowing them to operate more efficiently and directly provide specific services to customers globally.
Following are five golden tips, which can prepare SMEs to use e-commerce platforms: