MSMEs increasingly adopting digital tech: ICRIER Report

New Delhi, Mar 7 (KNN) The micro, small and medium enterprises (MSMEs) are accepting digital technologies into their businesses due to the challenges faced by traditional business with the outbreak of Covid-19, as per a survey-based report by Indian Council for Research on International Economic Relations (ICRIER).

Online sales account for 27 per cent of the total sales of surveyed MSMEs in 2020-21, up sharply from 19 per cent in 2019-20 and 12 per cent in 2018-19, reveals the study.

“MSMEs that have adopted the e-commerce platforms have experienced an increase in sales, turnover, and profits. This has also led to increased hiring. However, while e-commerce has been associated with improved employment opportunities for MSMEs, share of women participation in the work force in the surveyed firms remained significantly low,” said the think tank.

‘MSMEs Go Digital – Leveraging Technology to Sustain during the Covid-19 Crisis’ is the title of the report supported by a grant from Walmart.

This report presents a synthesis of the findings from a survey of 1,537 MSMEs (manufacturing units) across 10 states. It captures the impact of e-commerce on the volume of business, supply chain linkages and employment of MSMEs integrated with e-commerce platforms.

Tanu M Goyal, Principal Author of the report said, “The pandemic caused severe disruptions in the MSME sector, and existing studies report significant distress in manufacturing sector MSMEs. Our survey revealed that COVID led to a surge in the share of online sales and growth in the business of MSMEs that are integrated with e-commerce platforms. Whether this is a structural shift or a cyclical blip, needs to be evaluated further. The next phase of the study will dwell deeper into these issues.”

“While existing evidence suggests that the pandemic led to significant job losses amongst workers employed in MSMEs, our findings indicate that for MSMEs that were linked to e-commerce, it in fact served as an opportunity, as overall employment in the surveyed firms increased between 2019-20 and 2020-21,” said Co- author, Prateek Kukreja.  (KNN Bureau)