By Subbu Iyer
Micro, Small, and Medium Enterprises (MSMEs) serve as the innovation engine in any global economy. Over the last 25 years, they have contributed to creating 12.9 million jobs in the US, representing 66% of employment growth and nearly two-thirds of new private sector jobs. In China, SMEs make up 99% of all enterprises, contributing to at least 60% of the country’s GDP and generating over 82% of employment opportunities.
India is known as the largest SME market globally, with 75 million registered SMEs, expected to increase to 95 million or more in the coming years. In the fiscal year 2021-2022, MSMEs contributed to 29% of India’s GDP, representing 45% of total industrial production and 40% of total exports valued at $200 billion in 2022-23. Despite significant efforts by both central and state governments in India to support MSMEs, the actual impact falls short of the intended goals, with nearly 13,000 SMEs shutting down in just the last financial year.
MSMEs are designed to serve as the driving force of innovation in any nation. Their size and strategic position make them ideal for developing engines, components, and connections that large enterprises can then commercialize to introduce groundbreaking products and services. There is a significant global opportunity for MSMEs, particularly in India, to revitalize their role in the innovation ecosystem and counter the decline in their relevance. This involves integrating new materials like Nano, Biotech, and network technologies, as well as adopting new resources such as 3D/4D printing, Internet of Things (IoT), scanners, sensors, robotics, and renewable energy sources like wind, solar, and nuclear power.
We are on the brink of a new era, where Innovation involves simplifying legacies with purpose, modernizing processes, and creating disruptive impact through digital technology. Regardless of the aspect of life, MSMEs should infuse technology with human touch through learning, training, experimentation, execution, and evaluation.
Learning: Involves formulating questions to orient enterprises scientifically towards data that reinforces their positioning and priorities.
Training: Developing and managing new ecosystem processes to guide decision-making based on mind-to-market (systemic innovation), time-to-market (systems’ innovation), and systematic enhancements inclusively.
Experimenting: Implementing intelligent infrastructure for fearless experimentation within sandboxes integrated in Communities of Interest (COI) and Communities of Practice (COP) Glocally (Globally Local).
Performing: Building the next-generation engines, components, and connectors for personalized commercialization.
Measuring: Focusing on value creation rather than value extraction.
There is an evident need to envision a future that differs significantly from the current one, requiring a substantial reinvention process. The time for innovation is always present, and SMEs must act now to stay relevant in the value chain. Many SMEs are family-owned businesses that have been passed down through generations.
It is crucial for startups to view themselves as MSMEs, avoiding the pursuit of high valuations and unicorn status. Instead, there is a distinct role for MSMEs that can enhance their value with returns on assets deployed (ROAD). A glocal workforce strategy that can enable developing their people and talent is paramount for success. The new generation of leaders must embody the five A’s: Aspiration, Agility, Anticipation, Authenticity, and Ability.
Glocality goes beyond being a trendy term; it’s a crucial Frame of Reference (F.O.R.) for the upcoming generation of MSMEs. Digital technology enables them to converge the physical and virtual realms, offering the opportunity to attract talent globally. Despite facing geopolitical obstacles, the direct human connection remains unwavering. At this level, individuals are more focused on progress rather than nationalism or jingoism. Once empowered to participate, everyone on the planet cares about growth. Work needs a fresh definition from the past. The enthusiasm for creation should motivate the workforce, and workplaces should have an infrastructure that fosters open innovation. This vision should materialize in:
Fresh Structures: This involves reimagining working/reporting relationships, along with a new approach to rewards, recognition, and celebrations.
Innovative Synergies: Fostering open shared collaboration renewing culture including updating values, convictions, and assumptions through modernized ecosystem processes that transcend traditional corporate boundaries.
Modernized and / Or Disruptive Systems: Implementing digital tools to enhance access, distribution, and globally local reach.
In 1988, Andy Grove, the then Chairman of Intel, authored “Only the Paranoid Survive.” This publication demonstrated how he revolutionized the microprocessor industry by directly engaging consumers and emphasizing the importance of “Intel Inside” when purchasing a computer. The book focused on navigating crisis points that challenge companies and careers, a narrative that remains relevant today.
If we envision Intel as an MSME, there exists a remarkable opportunity to produce chips with features like autonomy, personalization, privacy, and security, independent of networks. Such groundbreaking innovations are achievable at the MSME level, breaking barriers in the invention-to-innovation cycle and embodying aspirations through data autonomy and access, essential for next-generation digital technologies.
Despite being behind Nvidia and lagging in digital technology innovation, Intel can rejuvenate its revolutionary market approach amidst stock challenges and imminent workforce reductions that are antithetical to creating a glocal workforce strategy that is so strategically relevant today.
This MSME renewal requires significant capital investment. Whether from government or private sources, funding the MSME sector for its development is crucial. It should be supported by a well-coordinated ecosystem that encourages collaboration among Communities of Interest (COI) and Communities of Practice (COP) in an open and shared environment. Encouraging innovation is vital, as the current setting lacks intelligent processes.
The core of the ecosystem lies in connecting, creating, and curating data for contextualization to facilitate intelligent decision-making. The workspace and surroundings should offer a secure, safe, and stimulating environment for young talent to engage with enthusiasm. Therefore, the expectations with respect to the tenure on returns should be mature to allow assetization rather than revenue monetization alone.
Essentially, for an MSME to be valuable, it must prioritize innovation. This emphasis should lead MSMEs to be interconnected not only at the enterprise level but also at a personal level across the environment, education, health, wealth, mobility, technology and governance, making technology meaningful in enhancing the quality of life. MSMEs play a crucial role in introducing new products and services that can significantly impact connecting lives for the greater good.
Subbu Iyer is the Founder & CEO of Giggr Technologies Inc. & Giggr Technologies Pvt. Ltd. Views expressed are personal. Reproducing this content without permission is prohibited.