27 Dec 2017, 09:59 — 6 min read
Small & Medium Enterprises have been the backbone of the Indian economy over the years and 2018, appears to augur well for them in a number of different ways.
Given some fundamental changes the country has seen in 2017, Indian SMEs are poised very well in 2018, providing they can adapt their basic business models to the opportunities these fundamental changes have brought within arm’s reach:
‘Regional & National’ will be the new ‘Local’: Three primary factors make SME businesses predominantly localized – a. Limited access to clients, suppliers & advisors (largely local within a short radius); b. Limited access to funds (assuming wider business reach and resultant volumes cause greater strain on limited capital); and c. Taxation and logistics led complications.
The implementation of GST has levelled the playing field for SMEs and the hitherto locally focused SMEs have a great opportunity to redefine the geographical ‘Local’. GST implementation has obviated tax formalities & complications goods & services supplied to non-local markets. Similarly, SMEs have wider options in accessing funds (see below note on ‘Access to Funds…’). Digital networking opportunities introduce todays SME to regional, national and global connection opportunities like never before – these include GlobalLinker and other digital solutions that make it easy to find business opportunities.
Improved access to funds will support business growth: SMEs have long been funds starved – both, in terms of equity and/or debt. Recent listings of SME stocks have met with very enthusiastic response and similarly, more innovative ways of scoring SME credit by banks and non-bank players is making access to debit easier than ever before.
SME Competition will yield to Collaboration: In the information age, SMEs are coming to realize, or will soon realize, it’s more about how information is used than mere access to information. Also, SMEs are seeing increased value from sharing and helping others. It is also seen as leading to improved opportunities and self-positioning. During and since the pre-planning of GST implementation, a CA member of GlobalLinker from a ‘Tier II’ city stepped up to write about the subject and even clarify questions SMEs from varied industries had around the subject. This has made this person the resident subject matter expert and earned him great respect and goodwill. Similarly, an increased trend of SMEs writing original educational articles on their subjects of expertise is being seen – on GlobalLinker we are seeing as much as 80% articles being contributed by SMEs. We see this trend stepping up further in 2018. Increased partnerships and collaboration will also be seen through increased ‘buy’ v/s ‘make’ – one place where this is seen extensively is the use of cloud services and building own service sets on top of such base services. Increased use of cloud storage instead of needing own ‘data centers’ is yet another trend which shows more opening of minds.
SMEs will digitize their businesses faster than ever before: SMEs in their capacities as consumers are seeing the great value digital capabilities are providing. This will start translating into greater digital adoption in their own businesses too. This is already seen in payments, post demonetization; with greater advent of electronic marketplaces, selling online has come to be accepted by many hitherto ‘traditional’ sellers of goods and services. Many more services are seen going digital and the common person - from a courier pick-up/delivery boy; to a food delivery agent; to services providers like a mason/plumber/carpenter/electrician and even cab drivers are today using ‘evolved’ digital solutions in better serving their clients. In 2018, more SMEs will explore and adopt basic and advanced digitization elements in their own business growth and efficiencies – from eStores, to AI, from the use of Chatbots to Robotics & Drones etc.
Like with all changes, 2018 will also see early adopters and laggards in embracing changes, including those enumerated above. SMEs have newer opportunities and increased access to new and improved ways of doing business. At a similar time next year, we will see the difference and lead early adopters have been able to gain but again, we may instead end up casting the 2019 picture instead as the future of today will be taken for granted as progressive people do, we too will look forward to more & better changes to come!
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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
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