Hurdles in ICT adoption among MSMEs

Although the MSME sector in India is gradually realising the importance of adopting technological and communication tools, some factors such as inadequate government support, funding issues and lack of technical know-how are inhibiting small firms to go for information and communication technology (ICT) adoption. This is further corroborated by the ‘MSME Outlook Survey on ICT' carried out by the Confederation of Indian Industry (CII).

Survey findings

CII's MSME Outlook Survey on ICT revealed that majority of the survey respondents have gained by using ICT, particularly in terms of bringing an improvement in their productivity, enhancing communication and establishing better relationship with clients. The survey was conducted to gauge the rate of technology implementation among small firms in India.

Nearly 85% of the surveyed respondents shared the view that ICT adoption offers the benefit of faster internal and external communication, while 83% opined that they have been able to develop better relationship with customers and partners with the help of ICT.

"Increased usage of advanced technological and communication tools enable MSMEs to keep themselves updated about the latest developments taking place in their sector as well as the corporate world, thereby also enabling them to match their core competencies as per market requirements," said N Pathak, proprietor of Neelhard Corporation, a small-sized IT firm in Kolkata.

However, despite realising the several advantages of the ICT usage, it has been observed that a section of the MSME sector continues to lag behind as regards effective ICT adoption.

"Limited financial capacity as well as inadequate government aid hampers the adoption of ICT among small firms. Added to this, shortage of skilled manpower makes it difficult for MSMEs to understand and put to use these advanced communication tools," said D Mohanty, an independent IT analyst in Guwahati.

The government has been urged to extend enhanced depreciation on IT products in order to push the usage of ICT and encourage greater investments in IT equipment and software among MSMEs.

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