SMEs are the pillars of not only the Indian economy but the entire world.

According to an estimate by World Bank, SME’s represent 90 percent of global businesses and more than 50 percent of employment. The numbers are growing with each passing year.

Similarly startups are not far behind. According to the 2020-21 Economic Survey, the Indian government currently recognises 41,061 startups, of which 39,000 startups have reported 4,70,000 jobs. These numbers clearly signify the importance of SMEs and startups on our economy and how leveraging these can ultimately lead to tremendous growth.

But the path is not so simple. Technology needs to play a major role to effectively harness the potential of SMEs and startups. Adoption of modern technologies like cloud, automation, and digitisation will not only raise productivity but will also ensure economic growth while optimising available resources.

Here’s how tech adoption can help SMEs and startups:

Make informed decisions

Modern technologies like big data and machine learning can help companies to get insights into business trends and forecasts that can help in streamlining their spend on the right areas.

For example, in the manufacturing sector cloud-based applications can help manufacturers monitor their production levels seamlessly. They can also predict machine failures and understand the various levels of raw materials needed to control production levels.

Reduced operating costs

Technology is not an expenditure but an investment. Investing in technology can help brands to reduce their various operational and marketing costs significantly. If we just look at digital marketing, it offers a wider outreach than traditional marketing channels at a fraction of the cost.

AI and Robotic Process Automation can help in automating mundane workflows and help in rightsizing the human workforce. Removing traditional physical servers and data centres, and adopting cloud technology can reduce costs significantly.

There are many varying estimates on the percentage of how much a company can save by migrating to cloud. The numbers might vary, but it is for certain that they are significant and create a huge difference at the end of the fiscal year. This is extremely crucial for startups and SMEs as their investments are limited compared to corporates.

Compete with global powers

We are in the midst of a technological industrial revolution where companies all around the globe are leveraging technology to stay ahead. Businesses in US, Europe, and China are using modern technological advancement in almost all sectors, be it accounting, marketing & sales, inventory management, customer service, and more to maximise efficiency, optimise performance, and drive business growth.

Indian businesses also need to follow suit otherwise we will not be in a position to compete in the international market.

Reach more customers

The success of various online startups and SME’s in India shows how companies can create more opportunities by connecting with markets at the micro and macro level, providing scope of tapping large and niche audiences through technology. This was earlier extremely expensive and outside the reach of small businesses.

Technology has also enabled companies to facilitate new connections and blend online and offline interactions. Also, thanks to the emergence of various online payment platforms online marketplaces have emerged that have helped other businesses to reach uncharted markets and audiences.

If used efficiently, technology is the best bet for startups and SMEs to grow exponentially and optimise their available resources. Ensure that the workforce is upskilled to be able to handle the advancement, otherwise startups and SMEs will be in the same situation where major IT companies are today – a large workforce without the right skillsets.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)