For small businesses, the last year has been tough. And with the recent surge in Covid-19 infections around India, there seems no early respite. However, these problems notwithstanding, small businesses in India do have a bright future ahead, says Nandan Nilekani, non-executive chairman and co-founder of Infosys.
“I think small businesses are the future of India, because India has literally millions of small businesses; just our GST system alone has about 11-12 million businesses registered. And I strongly believe that they are the engines of economic growth and job creation. And I believe that they will have a very good future,” he said on Saturday on the third day of Amazon Smbhav 2021, the e-commerce giant’s annual summit for small and medium businesses (SMBs).
Nilekani explained that there were many reasons why he thought so. “One is that, you know, folks like Amazon, are going to give them access to markets, both domestically and globally, increasing digitisation of our small businesses. So, they all have accounting systems, point of sale systems, now they're filing their GST returns online, and so on. And all this means that they are going to generate a wealth of data. And that data can then be used to offer them better services like lending, and so on. So, I think small businesses are being brought into a digital world, getting access to markets, and companies can now start leveraging their own data for the future. So, I strongly believe that if every small business creates one or two jobs more, that may mean 50 to 100 million new jobs,” he explained.
The Infosys co-founder argued that what India needs most now are job creators. “I think what Amazon is doing in India is very important. And I would like you to think in terms of how many million jobs you are enabling, because that is the future. For example, if you have 5 million suppliers on your marketplace, and each of them creates 5 million jobs, thanks to the market expansion you are offering them, then collectively, they have the potential to create 25 million jobs. And I think that is the point you have to emphasize... you have a chance to create jobs at scale,” he said at a fireside chat moderated by Mahendra Nerurkar, vice president & CEO, Amazon Pay India.
One is that, you know, folks like Amazon, are going to give them access to markets, both domestically and globally, increasing digitisation of our small businesses. So, they all have accounting systems, point of sale systems, now they're filing their GST returns online, and so on. And all this means that they are going to generate a wealth of data. And that data can then be used to offer them better services like lending, and so on. So, I think small businesses are being brought into a digital world, getting access to markets, and companies can now start leveraging their own data for the future. So, I strongly believe that if every small business creates one or two jobs more, that may mean 50 to 100 million new jobs.Nandan Nilekani, non-executive chairman, Infosys.
Nilekani recalled that Infosys, which was set up in 1981, had been a small company for the first decade of its existence. “But then, you know, India's economic liberalisation happened. And we suddenly realised that we were going to face the gale of competition with large companies coming…. And, therefore, we realised that we also had to scale up to survive in this new world. So sometime in the early ’90s, we put in place a lot of things like strategic planning, budgeting, putting in training facilities, building our own campus, and all that helped us to grow very quickly after that. So, we had a moment when we had to decide about our future. And I believe that all of India's small businesses can aspire to become large. And I think when they have partners like Amazon, I am sure they will do it,” he said.
The Infosys co-founder pointed out that small businesses could look forward to better credit facilities. “I think the other big thing which is happening today is the account aggregator framework, which allows businesses to use their own data for their future. And so an Amazon supplier can or Amazon on his behalf can combine not only the data that you have of that company, but also their bank statement, or their any other tax returns and so on, and, hence, get a better deal for them from a lender. So, I think the lending boom that is going to happen to small businesses in the coming years is going to be a key driver of growth.”
When asked what he would have been if Infosys hadn’t happened, Nilekani said that since he had a penchant for public service, he would have become a bureaucrat or a government servant. “But in a very funny way, I got to do that too. And so, I had the best of both worlds being able to be part of amazing journey of Infosys, and also for spending several years in the public sector, building population scale systems,” he said, referring to his stint as the chairman of the Unique Identification Authority of India (UIDAI) which developed and manages Aadhaar.
