7 MSME Trends To Watch Out For In 2022

Dive deeper into significant MSME trends in 2022 that can help businesses grow and become resilient.

Contributing about 45% of the industrial output and 40% of total exports and providing employment to 42 million people in the country, the Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in the economic development of India. 

MSMEs have displayed remarkable resilience by adapting quickly to the rapidly changing market landscape and leveraging unexpected business challenges to their advantage. This has further strengthened them and paved the way for their long-term growth. 

Of late, the market has seen a series of MSME trends that will likely remain prevalent in 2022. So let's look at what's new and which trends can still be put to good use.

Capacity Building 

The pandemic brought forth some unforeseen challenges and many sore spots in the way of doing business. Many MSMEs experienced the digital gap from both the associate side and consumer side. This has led to a surge in pursuing enhanced digital skills, enabling MSMEs to improve their capabilities through education, skill development, and practical training. Multi-sector partnerships. For instance, the joint initiative of the National Skill Development Corporation (NSDC) and Facebook to empower youth and entrepreneurs with digital skills in India has created a large engagement base. Through an institutionalized attempt at IT skilling, the country can reap the demographic dividend and supply a quality workforce to the MSME sector.

IT Infrastructural Development 

More and more small and medium businesses are becoming aware of the importance of access to quality IT infrastructure. However, the digital divide in the MSME sector is evident from the recent survey taken by ITC. Results reveal that email usage and web presence are far lower in small enterprises than in medium and large industries. Upcoming MSME trends in 2022 will see businesses deploying the following technologies to drive scale and agility. 

Internet: The nation had more than 825.30 million Internet users by the end of March 2021, registering a quarterly growth rate of 3.79 per cent from 2020. Mobile penetration has reached 173 million units as of 2021. Given the right push, MSME shall reap the potential benefits of changes in the ecosystem. 

Cloud Technology:  Small and medium businesses can use cloud technologies to their advantage. It will enable them to operate efficiently with maximum privacy and cybersecurity and improve collaboration by allowing their employees to access and use information via shared storage. Moreover, they can achieve costs advantage in a faster, better way. 

Artificial Intelligence (AI): 

AI is already being touted as the precursor for modern innovations. And with MSMEs already dealing with humungous data in the form of transacting parties, sales on credit, payments, reminders, etc. can take advantage of this technology to build superior and innovative applications. This would help them add value to their consumers' lives and assist them in driving scale. 

Big Data Analytics: MSME can use big data analytics to facilitate a greater understanding of users (their demography, suppliers, customers, etc. It will allow them to make informed decisions, allocate cashback and prevent payment fraud. Moreover, it will enable them to better monitor the demand-supply situation, thus creating a more significant brand impact within minimal operational costs. 

Personalized Customer Experience 

Modern digital technologies can enable businesses to provide personalized customer experiences. Day by day, businesses have begun prioritizing personalization as it can guarantee the following long-term benefits: 

A. Improved customer retention

B. Increased cross-selling and upselling

C. Enhanced customer satisfaction

One of the most distinctive forms of personalization can be seen in the sheer agility of contactless experiences. Consumers find them helpful for the ease of use and unmatched safety that they offer. Omnichannel personalizations have also led to a surge of 250% in purchases. 

Employment Generation 

After turbulent circumstances caused by the global pandemic, the MSME sector is now getting back on its feet, driving innovations and operational upgrades at a large scale to build resilience. Immense opportunities in the manufacturing, retail and service sectors. This has led to the generation of employment in MSMEs operating in these sectors.

Increased Export and Foreign Investment 

A great demand for native products such as timber items, spices, handicrafts and textiles is expected as the international market enters 2022. SMEs can tap this opportunity and grow faster. Upscaling of exports would also attract foreign investment. Since the growth trajectory of MSME is finally seeing a positive trend, the return on such investments would also be satisfactory, further improving their Year-on-Year turnover. 

Ease of Business 

One of the significant challenges that MSME face is the paperwork and document-intensive processes while carrying out their business operations and marketplace transactions. It has become imperative for MSMEs to embrace digital transformation to explore new avenues to enhance efficiencies and cut costs. Yielding the power of online marketplaces will provide MSMEs with a reliable way to achieve exponential growth. 


The Government of India has been advocating ‘self-reliance’ to be inculcated in every aspect of the country’s progress and development.  The upcoming 5G-optic fibre network and the government’s heavyweight outlay will expedite the MSME-B2B e-commerce partnerships in 2021. This will give the desired impetus for businesses to build a supply chain that is faster, more cost-efficient, transparent, and safer. Businesses will become resilient and self-reliant through digital interfaces, which will enable them to participate in global value chains. 

The above mentioned MSME trends would help businesses in the long run, enabling them to scale up at lower costs. The recent spike in digital transformation, supportive MSME schemes and the fintech revolution have been a blessing in disguise for most businesses. MSME can collaborate with fintech companies that access and analyze data from various pools to parametrize and fast track credit decisions. This can drive their business growth and agility. Inculcating positive lessons from the above trends and building capabilities to improve operations can enable MSMEs to unlock new opportunities coming their way.