A Study on the Impact of Digitalization on SME Growth

Introduction

Digitalization is the incorporation of digital technology into daily life, which includes the computerization of systems and employment for greater convenience and accessibility. Small and medium-sized enterprises (SMEs) have unique qualities that set them apart from bigger corporations. For example, more adaptability and agility in responding to changing situations, limited resources, and specialisation capacities (Kraft et al., 2022). To achieve improved operational efficiency and a stronger emphasis on the customer, SMEs are exploring digitalization initiatives to replace their ageing infrastructure with IIoT-ready networks. (Lee et al., 2017). This includes implementing certain digital technology in all aspects of production, planning, and design processes. With real-time data gathered from production and quality equipment available on the shop floor, quality iterations involving the phases of develop-test-analyse-implement can be simulated and hence validated in a digital environment. (Buer et al., 2018) Although it is critical to establish methods for systematically monitoring SMEs' performance in numerous elements of the digitalization, ensuring their survival and competitiveness, these traits are reflected in the digitalization process. SMEs could improve their business processes by utilising new digital technology as an effective method of disseminating information to a target audience at the point of request, without significantly increasing costs. Furthermore, one of the most significant shifts in human contact is the spread of online social networks. Along with its economic significance, digitalization of SMEs directly incorporates the social and environmental pillars of sustainability. Small and Medium Enterprises (SMEs) in the growth process mall and medium-sized businesses (SMEs) are considered as an important component of economic growth in India. It is crucial that SMEs adapt to this new technology to take advantage of its benefits, gain access to the market, and identify new business opportunities. Small and medium-sized businesses (SMEs) are thought to be responsible for 80 percent of global economic growth and make significant contributions to national economies. It was discovered in countries like Germany, China, India, and Brazil 4000 SMEs that had previously used digital technology produced jobs nearly twice as quickly as other SMEs. Furthermore, SMEs that trade globally are more optimistic in the present and future business climate and have better job generation potential. From it was observed that digitalization favourably improves the worldwide performance of SMEs. Digitalisation has changed the orientation of doing business. The entire process, from the acquisition of raw materials to production to delivery and consumption, has changed It has not only created buzz but has also brought about a significant change in how business is conducted. SMES are the engine of the Indian economy, yet they are up against fierce competition from international corporations. They experience themselves as small fish in a vast ocean, where their continued survival is in doubt. Also, SMEs are now struggling to survive in this cutthroat marketplace, they must alter their strategies as well as the way they sell their goods and services to consumers. Organisations have taken the first steps towards this revolution by focusing on the advantages such as an increase in sales and profitability due to increased reach, an increase in market share, the creation and building of brand awareness at a lower cost, quick feedback that allows companies to incorporate requested changes by customers, assistance with environment analysis and decision-making, and more satisfied customers as well as a more valuable customer insight. (Bouwman, et al., 2019).