New technology is putting conventional jobs out of business — MSME Exchange panelists highlight on how it helps in the long run

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New technology is putting conventional jobs out of business — MSME Exchange panelists highlight on how it helps in the long run
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  • Prof. V Padmanand, partner at Grant Thornton, highlighted that the cost-benefit of digital and technology services is something to be confident of.
  • Infibeam’s group COO Vivek Nayak added that smaller enterprises are being pushed out by larger enterprises
  • National institute of MSMEs’ Glory Swarupa emphasised that production is easy, the SMEs just need to find the right market before jumping in.
The pandemic-induced restrictions and lockdowns have accelerated the digitisation of several sectors, segments and businesses. One of the biggest things that were to come out of the pandemic is the increased integration of the technology into the Micro, Small and Medium Enterprises (MSME) that were still struggling to keep up with the changing times.

On the second day of Business Insider’s ‘MSME Exchange 2021’, several business leaders came forward to discuss how the MSMEs should approach the new tech solutions.

Prof. V Padmanand, partner at Grant Thornton, highlighted that the cost-benefit of digital and technology services in terms of basic compliance, basic bookkeeping and access is something to be confident of and it is only a matter of months before it turns into a digital revolution.

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He also noted that small solutions from companies like Khatabook, that offer digital bookkeeping solutions are puting jobs of small time accountants in danger.

“A simple initiative, let's say Khatabook or Deskera, is only facilitating bookkeeping and also services in regards to GST (goods and services tax] and compliance. The cost benefit is that in ₹2,000 or ₹3,000, I get both the compliance certification and also save up on the cost of an munshiji [company secretary]. A small business would otherwise be spending ₹30,000-₹40,000 on a chartered accountant (CA) or munshiji a year. But we have two options now, either Tally or Chargify, or Khatabook and Deskera who will only do it at 10% of the cost,” Padmanand added.

Meanwhile, Infibeam’s group chief operating officer (COO) Vivek Nayak added that the Indian market is structured like a typical economy, where the rich get richer and the poor get poorer. “I think what’s happening is that the smaller enterprises are slowly being pushed out by larger enterprises. We need to figure out a way to make sure that they stay within the game and within the competition,” he added.

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One way to do so is by giving MSMEs access to the global market. “There are two aspects to it, one is [the] commerce aspect and the other is, of course, the personal payments and personal related expenses,” Nayar highlighted.

He further explained that the SMEs registered on his platform have been given access to export their products abroad but the real challenge really is them being able to market their products abroad as it is quite expensive. “The [e-commerce] marketplaces can actually act as a catalyst to push or promote a product abroad, and you get a cut of it. So, you don’t have to do it yourself,” he said.

Meanwhile, Padmanand added that the Indian SMEs specialise in low quantity, customised products and the ecommerce play could really help them find a niche in the international market. He further noted that the direct-to-consumer (D2C) approach will further help them cut costs and avoid the middle men.

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Glory Swarupa, director general of National institute of MSMEs, emphasised that the production is easy and the SMEs just need to find the right market before jumping in.

Nayak added that when he started his business around 20 years ago, there were 86% of the small and medium enterprises in India that had no digital integration at all. Only 14% of them had some sort of digital innovation, while only 2% were actually online.

“And this extended all the way to 2012-2013, when the next big leap happened. Even then when that happened, the numbers went up marginally from, you know, 86% over 60%-70%. Only 30% [of the SMEs] or so we're actually digital. Out of that 8% are actually online. So from 2% in 2001-2000 to 8% [2012-2013]... That's the slow growth of how digital has been adopted by the SME segment,” he added.

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He also noted that things have started to get much better in terms of understanding of the technology, and it is making things much simpler. Nayak estimates that roughly 58% of the Indian SMEs would now have at least an email address, unlike the 15% in 2003. He noted that the main reason behind this growth is the fact that people or small businesses have started to realise the current trends.

SEE ALSO
India’s banks still shy away from lending to small businesses -- Business Insider’s MSME Exchange panelists debate the reasons
India needs to bring different solutions for MSMEs -- Business Insider’s MSME Exchange panelists highlight why
MSME Exchange 2021: The Irreversible Changes
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