The IUP Journal of Entrepreneurship Development
Digitalization of MSME Sector: Policy Initiatives and Challenges

Article Details
Pub. Date : June, 2023
Product Name : The IUP Journal of Entrepreneurship Development
Product Type : Article
Product Code : IJED020623
Author Name : Anupriya Pandey and Varsha Jaiswal
Availability : YES
Subject/Domain : Management Journals
Download Format : PDF Format
No. of Pages : 17



Micro, Small, and Medium Enterprises (MSMEs) in India are characterized by their dynamic and vibrant nature. The Government of India has set forth a vision of a progressive MSME sector and is currently developing various policies to support their efficacy. The process of digitalization presents a viable means of establishing a resilient and favorable commercial atmosphere that offers vast prospects to these small organizations, empowering them to engage in global competition. What measures has the government implemented to support the digitalization of the MSME sector? What is the response of enterprises to these policies and what are the primary obstacles hindering the progress of this developmental process? In order to achieve a notable enhancement, it is imperative to address specific inquiries. In order to investigate these inquiries, a study was undertaken utilizing both primary and secondary data sources. The study employed a sample of 138 entrepreneurs from the MSME sector located in Delhi, India. In general, the study indicates that the initiative to enhance the digitalization of MSMEs began only a few years ago. Although the progress was initially sluggish, it has since picked up speed. It is imperative to conduct e-literacy programs to enhance awareness about the significance and utilization of digital technology for business development, particularly at the grassroots level.


The process of upgrading business models through the adoption of digital technologies to enhance processes and create value through the digital flow of information is commonly referred to as "Digitalization" (Vivek and Chandrasekar, 2019). According to Matlay and Westhead (2005), digital technologies form the basis of the e-economy, a term that is frequently used interchangeably with other terms such as Digital Economy, New Economy, or Internet Economy. Amazon serves as a prominent illustration of how the incorporation of digital technology into a business model has transformed the company. Despite initially focusing solely on book sales in 1994, Amazon has since evolved into a prominent