Five Barriers To Tech Adoption Among India MSMEs

Slowed by barriers that keep them from adopting new technology, India’s micro and small enterprises are hindered in their ability to compete and grow. Those are among the results of a new study published by Intuit Inc., a provider of business and financial management solutions for small and medium-sized businesses.

The findings, based on original research across 12 cities in India, also identify important opportunities for government, industry and non-profits to collaborate on solutions that increase technology adoption and lead to better outcomes for micro and small businesses’ futures.

This study was supported by the Government of India’s Ministry of Micro, Small and Medium Enterprises, the National Institute of Entrepreneurship and Small Business Development, and the National Small Industries Corporation.
Existing Challenges

The study sought to identify and understand challenges facing small businesses and to offer solutions to help them adopt technology. It uncovered five barriers to technology adoption among India’s MSME community:

  • Cost
  • Lack of skilled labour and other resources needed to adopt technology
  • Lack of awareness around the benefits of technology, and doubts about the ROI from adopting technology
  • Questions on privacy and data security
  • Concerns over the reliability of infrastructure, namely broadband and connectivity

The findings were drawn from in-depth interviews with 748 micro and small businesses across 12 cities in India. The research started with a qualitative study that assessed how 20 micro and small businesses in four cities used technology and identify possible barriers to technology adoption. These conversations reflected Intuit’s “Follow Me Home” customer research methodology that combines a mix of both observation and conversation to understand the true nature of small business challenges. A follow-up quantitative survey asked 728 small businesses in eight cities to test these barriers and explore short- and long-term solutions.

Solutions Identified

  • Based on this research the study offered a series of recommendations for multiple stakeholders in the small business ecosystem, including industry, government and nongovernmental organisations, to address these challenges and increase technology adoption among MSMEs. Examples include

  • Making affordable technology solutions more accessible to end-users through government credits or easy financing options, such as pay-as-you-go or installment plans.

  • Focusing on campaigns that leverage case studies around the return on investment of newer technologies for small businesses, including cloud solutions.

  • Designing training programs that address key skill gaps throughout the supply chain.

Nikhil Arora, Intuit India’s Vice President and Managing Director said, “Intuit is focused on the success of small businesses around the world. In India, the MSME sector is second only to the agriculture sector in size and makes up almost 9 percent of India’s GDP and 40 percent of its exports. Faster and massive adoption of cloud solutions and mobile technology will play a crucial role in helping MSMEs win and succeed in India. With the support of the Ministry’s leadership, together companies, training organisations and other non-profits that serve small businesses, as well as the small businesses themselves, can bring about changes that will help jumpstart the way small businesses grow and thrive in a competitive global marketplace.”

Amarendra Sinha, Additional Secretary and Development Commissioner, Ministry of MSME said, “The Indian micro and small business sector has the potential to truly drive the future growth and prosperity of India and improve the lives of millions. Achieving this crucial objective requires improving MSMEs’ ability to access financing and adopt new technologies. Collaborative initiatives such as this Intuit-led study help us better understand the pain points the sector faces and the impact our existing and future policies will have on the sector at large. We hope this discussion leads to an ongoing dialogue about how together government, industry and the non-profit sectors can jointly address challenges and create opportunities for MSME growth.”