As technology and the Internet dig deeper into our lives, they become a disruptive force for many industries. The focus so far has been on the so-called “New Economy” startups versus the “Old Economy” incumbents. The conclusion of the first phase of the Internet revolution is that there is just One Economy and companies need to integrate the online and offline worlds to maximise growth and profitability. There is another aspect of enterprises which also needs to be looked at.
This is the small versus the large. What the Internet actually can do is to offer aggressive, smaller enterprises the opportunities to grow faster. Small-and-medium enterprises (SMEs) number over 25 million in the world. So far, their growth has been restricted to by many things: their inability to look beyond near-term survival, the vision of the owner-manager, the lack of resources, geography as a barrier to opening up new markets, and the high cost of technology. For SMEs willing to re-architect their businesses, technology and the Internet offers hope and a dream for the future – making information markets, and technology as a utility which not only lowers the cost of usage but also minimises the need for in-house IT staff.
For the first time, as the various technology trends get aggregated, SMEs can not just become important links in the supply chains of larger companies as outsourcing increases, but can also hope to grow beyond their smallness. Catering to the needs of SMEs, especially in emerging markets, is an interesting business opportunity. India now becomes a test-bed for various solutions and services – the ones that work can now be extended into other markets like India.
The “whole emerging market SME product” comprises of four components:
- Content and Community Website: think of this as an “Enterprise Reader’s Digest” where SMEs can get and share useful information, where they can meet others like them. This becomes a P2P (peer-to-peer) network for small businesses, one which they can turn to for news, information and advice.
- eBusiness Solution: offering a low-cost computing and communication platform, along with enterprise software components as utilities. This will mean getting SMEs to re-engineer their business processes around the software offered. An interesting add-on to this would be an “SME Client” – a low-cost PDA-like device with wireless communication capabilities built in. This way, everyone gets a “mobile browser screen” at a fraction of the cost of a computer.
- Outsourced Services: using India as the base, one can offer enterprises worldwide services to help manage not just their IT infrastructure, but also the back-office needs. These “remote services” can make for a much closer relationship with the SMEs.
- Marketplace: using the Amul model of aggregating farmers and cows (“milk producers”) into a co-operative, there is an opportunity to build an SME co-operative, which builds on not just the buying power of the group, but also facilitates the pieces to be part of a bigger whole. Like the fish in the Andersen ad, the SMEs by themselves maybe small but as an organised group can take on bigger challenges and competitors.
Thus, the opportunity, building on our six themes for the future, is to become the business platform for emerging market small and medium enterprises worldwide, offering integrated technology-driven solutions and services, to enable them to leverage the Internet, and grow bigger faster and more profitably.
