New Delhi, Aug 1 (KNN)  High costs of IT equipment and internet connections, weak environment for electronic commerce, lack of awareness of internet use and lack of IT skills have prevented small companies from using the internet to its full potential.

However, lower costs of IT equipment, improved infrastructure, skill development and progressive government policies can provide solutions, thereby enabling small firms to use internet to increase and expand business operations.

This was revealed in a survey conducted by FICCI, Nathan Associates Inc and Google India, titled ‘Unleashing the Potential – Internet’s role in the performance of India’s small and medium enterprises.’

The report while pointing to the fact that small and medium sized firms contribute significantly to GDP and job creation in India, thus helping the economy to grow said, “SMEs need the right business and regulatory environment, including modern infrastructure and technological tools.”

FICCI’s survey took into account 951 small and medium enterprises across the country to represent various industrial and geographical clusters.  That they had technical skills, entrepreneurial spirit and manpower to profit from using the internet was evident.

Significant, majority of the units that used the internet showed an increase in sales, profit, customers, geographic reach as well as increase in employment.

Further, more use of the internet resulted in higher financial growth.

“An SME that uses on average 10 GB of internet data per month has 7 to 32 per cent higher revenue, 8 to 43 per cent higher profit, 13 per cent higher employment, 22 per cent higher employment growth and 18 per cent more customers than an SME using only 5 GB,” it said.

It is common knowledge that internet can help small companies with big aspirations to realise their dreams by minimizing barriers of space and time, connecting them to customers near and far and improving their business processes.

SMEs too can use the internet as an effective tool to grow and expand.

The purpose of the study was to help policymakers understand the impact of the internet on SME performance so they will help facilitate internet use and encourage SMEs to use it to benefit themselves as well as the Indian economy.  (KNN/ES)

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