Why SMEs are not adapting to new technology

CIOL Bureau
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BANGALORE, INDIA: With the upcoming trend of technology adaption, the big companies have grown fantastically, however the SME market segment which happens to be the biggest supporting pillar of any developing economy can be seen vulnerable all over again.


As per an Intuit survey, SMEs have not been able to adapt to new technologies which in turn is hampering their growth. It is essential to understand that new technology which includes cloud computing, virtualization and open source are a boon not only for the big enterprises but also a blessing for the SMEs.

Currently, the trend of adapting to new technology has come to a steady pause when it comes to the small and medium enterprises. The very obvious question on their stability is bound to rise when the SME markets come to such a stagnant stop due to lack of technology support.

The main barriers to the adaptation of new technology for the SME segment is the lack of funding to buy the costly technology. Though aware that virtualization and cloud computing ensure a steady growth, SMEs have not been able to adopt them due to a massive financial crunch.


K R Thangaraj, president of Tamil Nadu Small and Medium Industries Association, said: “For medium scale industries, Cloud computing and virtualization on free source is still affordable, but for the small industries, it is way too expensive.”

When asked about his expectations from the government, he said: “Like any other developing sector, the government should also subsidize the technology for the small scale industries.”

The present state of SMEs in India requires a strong financial support from the government. It is necessary that the government makes an immediate move to make these technology solutions affordable to these small enterprises by providing government credits and easy finance policies.


This apart, SMEs also have several other problems like:

1. Cost and affordability of infrastructure.

2. Lack of skilled labour and resources to adapt the technology.


3. Lack of awareness among people about the benefits of the new technology. 

It has been observed that despite government's efforts to make the SME owners aware of the modern technology, what's lacking is a proper campaigning strategy that primarily focuses on returns on investment in technology.

It is a well understood fact that SMEs in India have the potential to drive India's future towards a brighter side however with such major barriers, the SMEs will definitely show a retarded growth.