With more than half a billion internet users in India, the country is one of the largest and fastest-growing markets for digital customers; nevertheless, the adoption of digital technologies is uneven among small and large businesses, as per the McKinsey Global Institute. The institute conducted a survey of over 600 firms, revealing that the adoption of digital technologies varies significantly across different sectors. The study concluded that companies classified as digital leaders, belonging to the top 25% of adopters, are two to three times more inclined to utilise software for customer relationship management, enterprise resource planning, or search engine optimisation compared to firms in the bottom 25%. Additionally, these leading companies are nearly 15 times more prone to centralising their digital management processes.
Though the country has been serving as a technology facilitator for many of the largest companies in the world to help them navigate through challenges, it itself benefited less from technological progress. This technological gap between India and its Asian Counterpart, China, is entirely worthy of attention. China has already amazed the world with its largest online bazaar and established itself as a global leader in renewable energy. Comparatively, India has just started to explore the potential of e-commerce. At the same time, the IT sector remains outside the parameters of millions of small and medium-sized enterprises, so most Indian citizens remain cut off from the technology and reap its benefits.
Small-medium businesses in India face numerous technological challenges, which affect their growth and competitiveness. Today, most SMBs do not have adequate IT infrastructure, including access to state-of-the-art hardware, software, good internet connectivity, and in-house expertise; this impedes their ability to adopt advanced digital solutions and for people to go digital. As technology and connectivity become omnipresent, Prime Minister Narendra Modi is taking a national digital initiative to curb this gap.
National Digital Initiative
India is a hub of innovation and excellence in every possible field. India has grown spectacularly in emerging technologies like blockchain, artificial intelligence, and cloud computing in recent years. However, to speed up its progress in the technological realm, PM Modi’s government took a national digital initiative in August with an aim to invest 1.13 trillion rupees ($19 billion) to bring broadband communications to 250,000 villages, provide universal mobile access, expand online government services, and enable online delivery of all sort of basics, as per McKinsey Global Institute. Unquestionably, the objective of the national digital initiative is to transform the country into a knowledge-based economy and leverage advanced technology to bridge the gap.
Digital India: Technology to Transform a Connected Nation by McKinsey Global Institute highlights the rapid spread of digital technologies and their potential value to the Indian economy by 2025 if the government and private sectors start working together to build a new digital ecosystem.
The current technological trends, such as IoT, blockchain, adaptive AI, cybersecurity, and sustainable technology, to name a few, are aiding Modi’s initiative. As per Statista 2023 data, India has the second largest internet population in the world at over 1.23 billion users, and out of these, 1.05 billion users accessed the internet through their smartphones. Many researchers predict that this figure will reach over 1.2 billion by 2050.
Microsoft’s Impact of Technology Adoption on Small and Medium Businesses (SMBs) in India reveals that 35% of SMBs in India are already spending more than 10% of their revenues on technology, while 26% have been early to embrace newer technologies. This shows a significant inclination of SMBs in India towards leveraging advanced technologies in their operations and making it easy for consumers to get services remotely without any hassle. The swift decline in cost and increased performance capabilities of small and medium enterprises with their adoption of digital technologies – cloud computing, mobile internet, and expert systems – is going to make a big impact in India. As per the same study by Microsoft, 35% of SMBs in India plan to switch to the cloud in the next 2-3 years to increase their operational efficiencies and make services accessible to consumers in a heartbeat.
The growing technological integration by SMBs in India will redefine how services are delivered in different sectors- education, food allocation, and healthcare. Research by McKinsey Global Institute indicates that existing applications in these sectors will contribute $160-280 billion to the annual GDP, simultaneously empowering ordinary Indians, especially in rural areas. Reading the current content of technology and initiatives taken by Modi’s Government clearly exhibits that the future of technology in India is bright and promising, which flourish the country to a great extent.