Data Driven Decision Making in MSMEs: PRISMA Review of How Data Management Affects Business Innovation in MSMEs in India

This article explores the influence of data driven decision making on business innovation in Micro, Small & Medium Enterprises (MSMEs) in India. In the contemporary business landscape, data management has become a pivotal factor
driving business innovation and strategic growth, particularly for MSMEs, which are backbone of Indian economy. However, despite the potential benefits, the adoption of data management practices in MSMEs is hindered by various challenges, including limited access to technology, inadequate data literacy, and resource constraints. This
research follows a systematic approach using PRISMA–Preferred Reporting Items
for Systematic Reviews and Meta Analyses method to analyze relevant empirical
studies published between 2022 and 2025. 70 articles are preliminarily discovered using thorough search of academic database Google Scholar. After we apply careful addition & rejection criteria—focused on studies specific to Indian MSMEs and the role of data management in fostering innovation—18 studies were selected for indepth analysis. The findings from these 18 studies highlight several key themes: (1) Data driven decision making significantly contributes to improving produce & procedure innovations in MSMEs, particularly by optimizing supply chains, improving
customer engagement, and facilitating better market analysis. (2) The adoption of
big data, cloud computing, and AI technologies is gradually being integrated into
MSME operations, albeit at a slower pace due to resource limitations. (3) The challenges of data security, privacy concerns, and insufficient technical expertise among
MSME employees are common barriers to effective data management. (4) Sectorspecific differences in data adoption rates were observed, with manufacturing and retail MSMEs showing more progress in data utilization compared to service-based firms. The review also identifies opportunities for policy interventions and strategic
frameworks aimed at enhancing the data capabilities of MSMEs. It suggests that governments, industry associations, and academic institutions cooperate essential part bridging technological & knowledge gaps within MSME sector. Additionally, the study emphasizes criticality of adopting data literacy & providing access to affordable tools that can facilitate incorporation of data analytics into MSME decisions making processes.