SMB to drive Indian IT industry growth: Zinnov Report

February 14, 2012: Small and Medium Businesses represents the essence of the Indian economy. In the case of the Indian Information Technology industry, about 30 per cent of the investment in the IT sector is made by the small and medium business in India. A major advisory firm, Zinnov has published their recent study which looks into the Information Technology adoption by the small and medium businesses. The report notes that there are 50 million small and medium businesses and out of which 10 million have already adopted Information Technology. The SMBs have started to shift from the traditional paper based business culture to adopt technology and thus improve the performance of their business.

In the present times, SMBs are found to be increasingly investing money on computers, internet connectivity and developing website of the company to become competitive in the market. According to Zinnov, the Indian IT industry is worth USD 25 billion, out of which 2 to 3 per cent is invested by the SMBs. In the case of SMBs, the number of employees is less than 1000 and the investment made by such organizations in the field of IT amounts to about USD 8.7 billion.  In India, small and medium businesses contribute 90 to 95 per cent of the business. They contribute to a significant portion of the gross domestic product.

The Director of Zinnov says that economic downturn in the western developed economies is temporary and is not going to impact the Indian Information Technology Industry in a big way. He also said that the market conditions in the western markets are unclear and so no predictions can be made on any slump in the growth of the IT industry in India.

He said that the small and medium businesses in the country will grow to become a major contributor to the Indian IT industry. The investments made by the SMBs are expected to increase at a rate of 15 to 18 per cent.  The SMBs present a lucrative market for the IT service providers, where the service providers have to identify their market and make sure that they turn this opportunity into revenue.

In India there are about 50 million small and medium businesses, out of which 10 million of them are registered presently. This is estimated to increase to 11 million within 3 years time.  So this will present a huge opportunity for the IT outsourcing industry in India, thus reducing the dependence on the external market.

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