MSME are micro, small and medium sized enterprises and are considered the backbone in any economy. The parameter of categorizing MSME differ across nations. In Europe, the main factors determining whether an enterprise in an MSME is staff headcount and turnover whereas in India the classification is based on turnover and investments in equipment/plant & machinery.
The total number of MSME in the European Union is over 25 million, with vast majority of Micro sized firms. MSME represent over 99% of businesses in the EU and employ two out of every three employees. They create 85% of all new jobs and generate about three-fifth of the EU value-added. In India, the total number of MSME was over 63 million in 2019, with majority of Micro enterprises in the rural areas. MSME’s contribute to over 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95%of all industrial units of the country and more than 6000 types of products are manufactured in these industries.
How many of these MSME make it to the next level?
The MSME comparatively struggle more than the large enterprises in the phases of development. These firms find it difficult to get financial aid, infrastructure and knowledge to support and grow their business. Governments play a major role here. With easing access to finance, promoting entrepreneurship, supporting start-ups, providing guidelines, initiating policies specific to the interest of MSME, tax exemptions etc. they prove to be a helping hand. Most of the nations have these policies in place to help and assist MSME and have proven to be effective to move them up the ladder, but this cannot be concluded for India and also for Europe as we can see a ‘Missing middle’. The substantial gap between the huge number of Micro enterprises to a very small ratio of Small and Medium sized enterprises discloses the challenges the MSME have to face in their survival and growth:
What can an MSME do on its own to grow their business?
MSME’s can do plenty of things to survive and grow. From utilizing the government aid, learning and acquiring new skills and knowledge, transiting from manual ways of doing business to investing in technology, building infrastructure, gathering funds, finding new opportunities for exports etc. One secret ingredient for the growth of MSME’s is effective marketing of its business. For a small business it is extremely difficult to understand and implement marketing strategies with huge budget but there are enormous ways that can help companies to stand out and carve a path of their growth through little understanding of Marketing efforts. India is paying immense importance to help & support small local firms. As the saying goes, success is achieved and maintained by those who try and keep trying, and it is time that MSME’s should try going online and marketing themselves to create an unbounded market that advances their growth.
Text by Kira Gisht