Follow us


How important is the growth of SME sector

 Global Scenario

The role of SMEs in the nation building can be seen more in the developed economies. The countries which are more advanced economically have a greater share of their overall growth coming from the SME sector. It helps not only in filling the demand- supply gap but also in redistributing wealth in the nation and achieving a more balanced growth.

India Scenario


Over the last five decades, the SME sector has shown significant growth with more than 40 million SMEs currently operating in India. SMEs contribute to 40% of the country’s exports
This sector has played a great role in job creation and major contributor of countries innovation.

Rising e-commerce and digital technology helped them transformed the way they were doing their business. Major trends for the Indian SMEs that can help achieve their full potential.

The Growth of E-Commerce and How It Benefited SMEs

E-commerce has been gaining traction in India and large number of SMEs are going digital and making their presence felt in the online world with 43% of them participating in online sales. According to a report by KPMG, the Indian e-commerce sector is expected to cross USD 80 billion by 2020, and by the next decade it will change the way small and medium businesses operate.

Ecommerce help their business platform get an edge, reach consumers directly and engage with them on a broader scale. Ecommerce portals such as Snapdeal and Flipkart already established themselves in the country to support the growth.

The platform is not just a solution to reach the customers but it also ensures a better consumer experience and higher profit margins.

SMAC – An ecosystem for today’s SME’s business reality

SMAC (social, mobile, analytics and cloud) is the concept that four technologies are currently driving innovation and adoption of these technologies by SME sectors brings revenue growth and operational efficiency. They will even find it easier to define business strategies and get a level playing field to compete with larger players. Penetration of technology into urban and rural areas has made adoption simpler.

SMAC creates an ecosystem that allows a SME’s business to improve its operations and get closer to the customer with minimal overhead and maximum reach. It’s the synergy created by social, mobile, analytics and cloud working together that creates a competitive advantage.

Make in India – A benefit that the Govt extend to SME’s in India

Government initiatives such as ‘Make in India’, ‘Startup India’ and ‘Skill India’ are aimed at enabling the growth of SMEs in India and promote an entrepreneurial culture.

Initiatives such as ‘Make in India’ aim to increase the growth of manufacturing sector by 12-14% per annum and increase its share of GDP to 25% by 2025. According to the estimates of the study done by the McKinsey & Company, the share of SME sector in India’s GDP may increase by 1.5 times by the year 2016. The rise in the share of employment would be even more magnified.

The government and banking system and the capital markets increasingly understand the importance of SMEs in the overall growth of the economy. Their new and exclusive policies and products, innovative ideas to support the growth of SMEs. Credit rating for fund raising, Financial products and services with better payable options, Ease of listing, Special incentive schemes and promotion policies are some of the sector developmental programs to support SME growth.

Cloud based ERP and SCM Applications – A key adoption strategy for SME’s to improve profit and Optimize business process

In today’s scenario, technology has become the pulse of modern day business and this change has been largely observed with the Indian small and medium enterprises (SMEs) that contribute more than 60% to the Indian GDP while their spending on IT is only 30% of India’s total IT spending. In spite of this, there are certain challenges that the Indian SMEs are facing in terms of productivity and efficiency. SME is not very tech savvy and their use of computing is limited to using emails and web browsing.

ERP and SCM are some of the application tools helping SME’s optimize their business processes and improve profit. Applications are exclusively developed for SME’s with affordable pricing model. SAP Business One is quietly growing its presence in the SME ERP market.  It leads the company’s product roster in its number of customers, with just over 48,000, according to Luis Murguia, SAP senior vice president and general manager for SAP Business One.

Time to act – an insight for SME OWNERS

Particularly SMEs need to have a more educated work force, and provide formal structured training to their workers. They have to adopt greater automation and quality control in production, and improve on the human resource management and compensation practices that emphasize job stability and skill acquisition. This is an important step to move to a greater efficiency level in their operation. More efficient firms have already attracted many foreign partners and global investors.

In short, the SME sector would be the sector which will set the trends in the Indian growth story. It will bring about an inclusive growth which will propel India to achieve the status of a developed nation in the long run. SME owners must adopt the current trend and tap the market potential before they lose their market share and become extinct in this competitive world.