The story of David and Goliath is all too familiar. What escapes our attention is David’s vision to see possibility where anyone would see hopelessness. For David, Goliath was too big to miss, whereas for everyone else he was too big to hit.
The scenario for SME in India is very similar. SME are painfully ignorant of the possibilities that exist for them. Absence of adequate and timely banking finance, limited capital and knowledge, non-availability of suitable technology, low production capacity, ineffective marketing strategy, non-identification of new markets, constraints on modernization & expansions, non availability of skilled labor at affordable cost, necessity for constant follow up with various government agencies to resolve problems – these are just part of the huge iceberg that blocks their view of the plethora of opportunities that exist on the other end of the spectrum.
A study of this sector reveals many puzzling anomalies. This sector with 4.88 crore small and medium enterprises gives employment to around 8.11 crore people in India. Yet, this has managed a CAGR (compound annual growth rate) of just a dismal 5.29 percent. The dichotomy that stares at us squarely in the face is that Indian SME employ 40% of India’s workforce, but contribute only 17% to the Indian GDP. Why is this so?
Firstly, many Small and Medium Enterprises stay small, unregistered and un-incorporated in the organized sector just to avoid taxes and regulations. This is being penny wise but pound foolish. To avoid small setbacks they miss out on the large gains. Expert advice giving them a broad perspective about scaling up should be made available.
Secondly, despite its commendable contribution to the Nation’s economy, SME Sector is but a paper tiger. This does not get support from Government Departments, Banks, Financial Institutions and Corporates. A transparent fast-track reliable and economically feasible support system that facilitates SME in becoming more competitive in the National and International Markets is the need of the hour.
Thirdly, SME lag behind in product or service standards in the global arena. Exposure to latest developments, and skills is necessary to help them keep pace with the global developments.
Lastly, only the big corporates have the capacity to bargain with institutions and vendors. Studies indicate that SME need specific, targeted support.
We at Goldchip, are pitching in with policies, strategies, alliances, and professional expertise to ensure that SME get what they deserve – bargaining power as a collective, well-informed, unified entity. Watch out this space for specific offerings…