Impact of digital practices on day-to-day business operations of MSMEs in Karnataka

The primary objective of the article is to analyse the impact of digital practices on day- to-day business operations of MSMEs in Karnataka by using structural equation model (SEM). Micro, small and medium-sized enterprises (MSMEs) are considered as a crucial component in the development of the economy. They contribute in employment, industrial output, GDP, and exports of the country. Karnataka is one of the fastest growing IT hubs in the country and home to the world’s fourth largest technology cluster. Karnataka is known as India’s Knowledge Capital and one of the country’s leading industrial states. Despite its apparent success, this sector faces a number of challenges. In today’s digital era, new digital technologies have opened up numerous opportunities to transform the businesses. The use of digital technology is one of the measures that helps to face the competition and also to grow the business operations. In above context, this study is focused on exploring the impact of digital practices on communication, inventory management system, administration and maintenance activities, customer relations and marketing and advertisement activities of MSMEs. This study used 900MSMEs in Karnataka by using structural questionnaire method. The investigation and analysis ofdata indicates that there is a positive impact of digital practices on day-to-day business operations of MSMEs. The study recommended that the government should encourage young entrepreneurs to become digitally literate that helps to improve business operations.