80% of SMEs want more govt funding initiatives to support digitalisation of business: Survey

80% of SMEs want more govt funding initiatives to support digitalisation of business: Survey

A recent survey conducted by Capterra India, a software reviews platform, sheds light on the sentiments of Small and Medium Enterprises (SMEs) regarding digitalization and government funding initiatives. The survey, titled “Digitalisation of Indian SMEs,” focuses on evaluating the level of digitalization among SMEs in India, the role of government funding and initiatives, as well as the challenges faced by these businesses.

The survey received responses from a total of 435 participants, including managers, senior managers, CEOs, and founders. Out of these, 341 respondents were associated with SMEs, while 94 were affiliated with larger enterprises employing more than 250 individuals.

Key findings from the survey include:

1. Government Funding and Digitalization Support: Around 80% of SME respondents expressed the need for increased government funding initiatives to aid their digitalization efforts. This sentiment underscores the importance of financial support in facilitating the adoption of digital technologies and practices among SMEs.
2. Digitalization Status: The survey aims to evaluate the extent of digitalization within SMEs, reflecting the current level of integration of digital technologies into various aspects of their operations.
3. Barriers and Challenges: The survey also sought to identify the primary barriers and challenges faced by SMEs when undergoing digitalization. This information can offer insights into the hurdles that need to be addressed in order to foster smoother and more effective digital transformation.

By collecting responses from a diverse pool of participants, including those from SMEs and larger enterprises, the survey aims to provide a comprehensive view of the digitalization landscape in India. The insights gleaned from the survey results can guide policymakers, industry stakeholders, and business owners in understanding the needs and preferences of SMEs when it comes to adopting digital technologies and the role of government initiatives in facilitating this transition.

The survey conducted by Capterra India reveals that only a small proportion, around 6%, of respondents suggested exploring alternative sources and reducing reliance on public funding for supporting digitalization efforts among Small and Medium Enterprises (SMEs). This suggests that the majority of respondents prefer the continuation of government funding initiatives to aid their digital transformation.

The survey highlighted several existing government initiatives designed to support the digitalization endeavors of SMEs in India. These include:

1. RAMP Programme: The RAMP (Rebooting the Auto Components Manufacturing Programme) initiative is aimed at enhancing the competitiveness of Indian auto component manufacturers through various interventions, including technology upgradation.
2. MSME Innovative Scheme: This scheme focuses on promoting innovation in Micro, Small, and Medium Enterprises (MSMEs) by providing financial support for research and development activities.
3. ASPIRE Scheme: The ASPIRE (A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship) scheme targets promoting entrepreneurship and innovation in rural and agricultural sectors, facilitating their transition into competitive businesses.

These government initiatives are tailored to cater to the specific needs of SMEs, encouraging them to embrace digital technologies and innovation. By supporting such initiatives, the government aims to foster a conducive environment for SMEs to thrive in the digital economy.

The survey results reflect the perspectives of SMEs and their preferences for receiving support. While public funding remains a preferred avenue for many respondents, exploring alternative funding sources could be an area for further consideration. The balance between government funding and other funding avenues can play a pivotal role in sustaining the growth and digitalization of SMEs in India.

For startups and small businesses in their early stages of development, the lack of funding can present challenges in implementing digitalization plans. Such businesses may find it difficult to initiate digital transformation without financial support.

The survey conducted by Capterra India sheds light on the funding landscape for digitalization among SMEs. Key findings from the survey include:

1. Government Funding Uptake: Around 40% of the respondents indicated that they had received government funding for digitalization initiatives at least once. This suggests that a significant portion of SMEs have availed themselves of government support for their digital transformation efforts.
2. Frequency of Government Funding: Among the respondents, only 20% reported having received government funding for digitalization on multiple occasions, indicating that continuous support might be relatively less common.
3. Non-Application for Funding: Approximately 20% of the respondents did not apply for government funding for digitalization. This may reflect factors such as lack of awareness, eligibility criteria, or other considerations.
4. Interest in Funding: Interestingly, 8% of the respondents were unaware of any available government funding but expressed interest in applying if such opportunities were known to them.

Sukanya Awasthi, Content Analyst for Capterra India and the Digitalisation of Indian SMEs survey, highlighted the significance of the MSME sector in India’s growth story. With India aspiring to become a $5 trillion economy and seeking a substantial contribution from the MSME sector to the GDP, government initiatives, funding, and incentives for SMEs are crucial.

The survey’s insights indicate the varying degrees of engagement with government funding for digitalization among SMEs. It suggests that while some SMEs have accessed such support, others may not be fully aware of the available opportunities or may have different funding strategies. This complexity underscores the importance of a multifaceted approach to fostering digital transformation in SMEs, taking into account the diverse needs and circumstances of different businesses.

The survey conducted by Capterra India highlights the barriers and challenges faced by SMEs in their digitalization journey. Key findings in this regard include:

1. Cybersecurity Concerns: Cybersecurity emerged as the most significant barrier to digitalization, with 36% of the respondents citing it as a major challenge. This underscores the critical importance of safeguarding digital assets and sensitive data, especially as businesses adopt new technologies.
2. Integration of New Technology: Integrating new technologies with existing systems proved to be a challenge for 26% of the respondents. This points to the complexities of harmonizing diverse technologies and ensuring seamless operations within an organization.
3. Lack of Expertise: The shortage of expertise required to successfully implement digitalization was identified by 24% of the respondents as a barrier. This highlights the need for skilled professionals who can guide and execute digital transformation efforts effectively.

Despite the recognized benefits of digitalization, including increased efficiency, enhanced customer satisfaction, and higher profits, certain companies faced challenges in continuing their digitalization initiatives. The survey identified the following reasons:

1. Limited Budget: A lack of budget for implementation was cited by 37% of the respondents as the primary reason hindering their digitalization efforts. This highlights the financial constraints faced by many SMEs when trying to invest in digital technologies.
2. Employee Concerns: Around 34% of respondents expressed concerns about overwhelming their employees with technology. Balancing the adoption of technology with employee comfort and readiness is crucial for a smooth transition to digital operations.
3. Lack of Awareness: A lack of awareness regarding software that could enhance current processes was a barrier for 29% of respondents. This indicates the need for information and education about available digital tools that could benefit SMEs.

These findings emphasize the multifaceted nature of challenges that SMEs encounter when embracing digitalization. The interplay between financial considerations, human resource factors, and the need for technological expertise shapes the landscape in which SMEs navigate their digital transformation journey.