Micro, small and medium enterprises or MSMEs and digital technology are among the biggest influencers in the Indian economy and will become unstoppable when they converge.

If we go back a decade or two, MSMEs, other than those in tech-enabled lines of business, resisted going down the digital route. The reasons were not arbitrary. Implementing digital technology came with its own sets of challenges—high capital investment, the need to recruit a white-collared IT task force, and training the workforce on things that seemed alien to them. In short, the hassles outweighed the benefits.

Changes in the digital workspace are taking care of the inhibiting factors. Almost all the business solutions that an MSME needs now come with flexible payment options of SaaS (Software-As-A-Service). An MSME no longer needs to set up an expensive data center but can opt for less capital-intensive cloud options. Add the smartphone revolution and the workplace changes wrought by the COVID-19 pandemic. Almost every business household may now have at least one smartphone, which gives them the platform to run business apps. The apps are user-friendly.

With all these changes, MSMEs can now plan their digitalization with better clarity. Several business processes can adopt automation and artificial intelligence capabilities, increasing overall efficiency. Many MSMEs have started implementing IoT or “Internet of things” solutions to automate triggers for functions that earlier needed manual intervention. For example, a flower cultivation business can easily automate the water sprinkling process based on a few monitored parameters. We also need to keep in mind that sustainability is no longer a responsibility of only the bigger corporates. MSME businesses also need to keep a keen eye on sustainable options that give them good business returns. Energy use is the first thing that comes to mind.

On the sellers' side, the digital world has progressed to a level that MSMEs hardly need any extra effort to get them on the platform. I find solutions floating around where an MSME business does not even need to build a website, leave alone enable e-commerce. All this, with minimum upfront investment. This opens the entire world for MSMEs and those who stay back run the risk of losing out to market dynamics.

The way MSMEs and digitization are working hand-in-hand, the outlook for India’s business environment is bright.