NEW DELHI: Disruptions in business due to lockdown have caused a huge setback for Indian economy. However, adoption of digital technologies by small and medium businesses (SMBs) could add $158-$216 billion to India’s GDP by 2024 and contribute to the country’s economic recovery post covid-19, said Cisco India SMB Digital Maturity Study 2020.
For the study, Cisco roped in International Data Corporation (IDC) which gathered and analysed data from over 1,400 SMBs across 14 countries in the Asia Pacific region.
The study shows that 68% of Indian SMBs are already on the path of digital transformation and have digitalised various products and services. Around 60% are aware of digital transformation efforts by peers, and want to adopt it to keep pace with rivals. Another 50% want to use digital technologies due to the shift in customer preferences.
According to experts, most customers who have started using digital platforms are unlikely to go back to offline services post covid-19.
Due to the cash crunch, many organisations are expected to prioritise spending. As per the Cisco survey, Cloud was the top investment priority for SMBs in India (16%), followed by cybersecurity (13%) and IT infrastructure software (12%).
Shortage of digital skills and talented people are the top hurdles in the digital transformation efforts for SMBs in India.
“Digitalization is no longer an option for SMBs – it’s a matter of survival. As SMBs rethink processes, operations and customer engagements, they are looking at cloud services and cybersecurity first, but also have increased their focus on customer experience, video conferencing and AI/Analytics solutions,” Daniel-Zoe Jimenez, AVP, Head Digital Transformation & SMB research at IDC said in a statement.
Data from the APAC region revealed that 16% of SMBs are currently in the advanced digital maturity stage, also known as stage 3 and 4 compared to 11% in 2019. More than 50% of SMBs are now digital observers also known as stage 2, while 31% are still reactive to market changes and are still in stage 1 of digital transformation.
A separate study by Google, Nasscom and ICRIER, an Indian think tank, published July 27, estimated that a unit increase in artificial intelligence intensity by organisations in India can lead to a 2.5% increase in the country’s GDP in the immediate term. AI intensity is measured as the ratio of AI to total sales of the organisation.