Despite the economic downturn, Indian small and medium enterprises (SMEs) showed most optimism regarding economic growth in 2009, over majority of their counterparts in the Asia-Pacific, the UPS Asia Business Monitor survey reveals.
As much as 40% of the Indian SMEs were optimistic on the growth trajectory. However, compared to last year, there is a decline, when 64% of the Indian SMEs has showed optimism regarding the same. Whereas, only 15% of the SMEs in the APAC region showed similar optimism.
The survey also reveals that the Indian SMEs see IT as the major driver for growth, followed by building & construction and healthcare & pharmaceuticals sector. About 37% felt that IT will continue to be the growth driver, whereas 29% saw building &construction to be a major force. And, 26% felt healthcare & pharmaceuticals will play an important role in their growth.
Not only for the current year, Indian SMEs also feel that due to the changes in the financial services sector, the key economic pillars for SMEs in India over the next three to five years will be IT, building & construction and manufacturing. Moreover, 29% of Indian SMEs also expect to increase their workforce, whereas 59% expect to maintain their workforce in 2009, which indicates that the Indian SMEs are expecting growth in 2009.
Pirojshaw Sarkari, MD, UPS Jetair Express, said the Indian SME sector should focus more on Latin America, Africa, and should also increase its focus on intra-Asia trade, as Europe and America are the two key markets reeling under pressure.
?Europe and America have always been the two key markets, but now is the time for the Indian SMEs to focus on Latin America, Africa, and also on intra-Asia trade, as huge opportunity lies there,? Sarkari said.
In the survey, Indian SMEs have showed mixed sentiments towards China. In India, 37% of the respondents see China as a boost, and 28% see it as a threat, and three out of four Indian respondents feel SMEs in China are their biggest competitors.
?While both India and China are major outsourcing locations for the world, they are backed by their fast rising domestic market, which are helping them to weather the impact of the economic crisis,? said Sarkari. ?However, the major obstacle for the Indian SMEs at this point of time is the lack of institutions willing to lend small businesses,? he added. While Indian SMEs are the most optimistic about growth, 25% believe that economic recovery will come in 2009, as against 13% SMEs in other APAC region.