SMEs in India contribute to around one-third of the country’s GDP- Gross Domestic Product. SMEs and MSMEs in India play a crucial role in India’s development and employ over 110.9 million people. In addition, many government schemes such as Start-up India, Digital India, E-Governance, etc. are also helping the MSME sector in India.

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These government schemes are helping in empowering the SMEs in India by helping in improve their operational efficiency and customer reach. With the advent of technology, improved infrastructure, and online transactions, a newer market is open for the SMEs in India. This is opening new opportunities for the MSME sector in India.

What is Digitization?

What is Digitization?

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Digitization is the process of converting data and information into digital formats. It is like converting a book in paper form to e-book. Here, all the information is converted into bits (binary digits or computer language in simple words).

Digitization makes it convenient and easier to access, share, and preserve information and data. For instance, a book or a simple piece of information can be accessed by people worldwide if digitized. In recent times, there is a growing trend of increased digitization. And so is for the world of business. The main reason why the business world and SMEs in India are adopting digitization is that it makes work smoother, faster, and efficient.

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How Digitization is Changing the Business World?

Digitization is Changing the Business World

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Digitization in the business world is seen as change and development. It has made business work elastic and is constantly modifying it as well. The following are the ways in which digitization has changed the business world and therefore, the MSMEs in India:

Flexible Work

The digitization has enabled a businessman to work as and according to his convenience. With all the data and information stored on the device or computer, the businessmen can easily access it and transform it. So, the work schedules can be adjusted according to personal needs.


Digitization is not only about converting data and information but also about using technology to find new ways of doing business. There are so many new solutions and innovations present in the market which can be employed by almost all the businesses. Innovation with the help of digitization helps the businesses and SMEs in India to come up with new ideas and inventions, reach wider audiences and customers, and manage work efficiently.

And above all this, create a better product or service that can attract customers, keep them happy and satisfied, and enhance their lifestyle.

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Communication is an important aspect of life, so for business. A business cannot thrive without proper communication. Without proper communication with the target audience or customers about the offered product or service, there can be no sales and profits. In addition, in case the customers already know about the products but are not properly informed, it can lead to conflicts or misunderstandings.

There are different channels that enable a business to communicate with its customers, such as Skype, email, Facebook, messenger, etc. In addition, other important information such as files and documents can also be transferred.

How Digitization is Helpful for SMEs in India?

Digitization is Helpful for SMEs in India

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Digitization is certainly beneficial for big companies and businesses. However, it is also helpful for the SME sector in India. The following are the benefits of digitization for the SME and MSME sector in India:

Enlarged Scope of Operations

The digitization and advancement have enlarged the scope of SME and MSME operations. The SME sector in India is witnessing more expansion opportunities. In addition, the digitization offers cost-effective solutions to SMEs in India to reach a wider customer base. So, there is no need to be limited to a local audience.

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According to a report, start-ups and businesses with online presence and engagement witness a growth of 20%. And business without online engagement witness only 11%.

Breaking Boundaries

An online presence makes the SME in India break all the boundaries of location and time. The online presence provides significant growth and expansion opportunities through the company website and mobile App. This brings in more business in the form of new customers from local, national, and international markets.

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With digital payments, SMEs and MSMEs in India have access to the cashless transaction which provides transparency as well as flexibility. This benefits the business to attain improved customer loyalty. Read the top 5 types of digital payments in India.

Prevention of Fraud

Increased digitization and digital payments in India has decreased fraud and duplication. This saves time, effort, and money.

Thus, it can be said that the digitalization has helped the SMEs and MSMEs in India in terms of improved efficiency, productivity, transparency, reach, and accountability.

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