India’s SME taking tech first approach

Leveraging technological advancements, Indian SME sector is estimated to close FY23 with 740K employees, with hiring for digital skills growing 2X faster than traditional tech talent in FY20. Areas such as Cloud, Digital Engineering Services, Advanced AI/ML & Analytics and IoT & Blockchain constitutes key digital talent areas for the sector in FY23E.

Photo Source: Shutterstock

New Delhi, March 29: Expectations from India’s SME segment is blooming at an accelerated pace, as it is increasingly offering digital solutions around the world. According to the report, called “India’s Tech SMEs: Rising in the Global Digital Arena”, small companies are taking tech-first approach to tackle tough challenges.

The report, released by industry body NASSCOM in collaboration with ProHance, made several notes on the current status and potential of the tech SME landscape. With growing tech demand, the India’s SME sector is expected to contribute 7–9% to the overall FY23E tech industry revenue at $15 Bn – $20 Bn, higher than the pre-pandemic share of the tech industry at 4-6%. SMEs are increasingly offering digital solutions to global clients, many of which are world leading products and services.

The segment is also diversifying digital offerings across geographies. North America accounts for 50-55% of the Indian tech SMEs revenue with specific focus around niche cloud, AI, IoT and SaaS products. This is followed by Europe at 19-20%, and the domestic market at 17-18%, in FY23E. SMEs have also in FY23.

Debjani Ghosh, President, NASSCOM, has said, “The Indian tech sector has more than 10,000 SMEs dedicated to provide traditional & digital services to tech buyers globally as well as domestic. The thrust to digital services has also led innovative digital SME betting on deep-tech solutions that either vertically integrate functions, or horizontally integrate value chains. However, for traditional tech SMEs to navigate headwinds, shift to digital is eminent. Fast tracking innovation, supportive government policies & incentive schemes and dedicated SME – industry – academia connects will further augment the sector’s growth and help achieve double digital revenue growth vision by FY30E.”

SMEs have also increased their presence in the APAC region by making inroads into non-traditional Japanese and Australian markets and are exploring deeper penetration into middle east markets like UAE and Saudi Arabia.