MSMEs must digitise, modernise to thrive

Most of us, those are into business and mainly into export, have hardly seen the thrust of any government on the export promotion and that too from the top leadership. Last week, PM Modi inaugurated 'Vanijya Bhawan' and also launched NIRYAT portal. It was heartening to hear PM insisting on 'whole of government' approach.

All leading ministries like the Ministry of MSME or Ministry of External Affairs, Agriculture or Commerce, all are making common efforts for a common goal.

And not only these ministries, in recent years efforts of the Indian embassies in various countries are also worth appreciating regarding export promotion, to help India's export.

Interestingly exports from new areas are increasing like one district one product scheme is helping to increase export from grass route and best example is the increase in exports of cotton and handloom products by 55 per cent. It is self-explanatory how the work is being done at the grass-root level.

On Monday, June 27, there is World MSME day and our textile, as well as overall industry, has a significant role in export. Out of India's total $ 670 billion export, MSME have a share of around 40 per cent. Apart from this figure, we must recognize that MSME units help big units in various ways and MSME's indirect contribution is much higher.

So, it is natural that growing Indian export also shows the growth of Indian MSMEs. As per reports, in 2021- 22 total loans sanctioned to MSMEs stood at Rs. 37.29 trillion, an increase of around 5 per cent over 200-21.

But on the other side whenever any discussion about MSMEs, be it any official platform or chit-chat of business friends, this segment often feels more challenging, struggling to survive and just managing business anyhow rather than enjoying good growth and focusing more on new opportunities to grow.

The ground reality is that facing and overcoming all the challenges, the major MSME segment is surviving and to improve they have to go through a few major changes. These changes don't need much investment. Need to change our mindset and be ready to accept changes.

First and most important step for the MSME is to invest in the latest technology. One has to accept that in the era of artificial intelligence, and machine learning, there is no growth with the proper use of such elements. For example in the garment trade, proper use of cutting room solutions has a major impact on saving but the majority of MSME are not using this as they feel that their traditional ways are enough. So change is required at their mindset.

Many MSME firms don't have even a reasonable social media presence while many leading startups, direct-to-consumer brands, and digital-first brands use social media as a ladder for themselves. Still, many small firms don't have a proper website. One may argue that how social media or online presence is a must for their B2B operations but it is well-established fact, social media is now not only unavoidable, but also it opens new path for growth. Again this won't require any major investment and owners running their business traditionally have to change their mindset.

Another important point is the need to change their working culture. Owners' involvement in small business is very much required at every step, decision making to a lot of paperwork etc. But to focus more on business enhancement, owners have to decentralize their powers and strengthen their teams for decision-making. One need not hire highly paid well qualified professionals, but need to train, trust and develop whatever team is there supporting the business. Training is not only required for blue-collar or white-collar jobs, time to time training is also a must for promoters. But I have seen a mindset in a majority of owners who have an attitude that they know everything and if they don't know, they will not learn and anyhow manage. While this is wrong, one has to learn and unlearn every day. The organised way of working is also part of improving culture and focusing more on growth avenues, rather than keeping yourself busy in micromanagement.

Most of the small units are family-run and there are plenty of issues in most of the family-run businesses. Small units have the option to run the business professionally without losing any control over the business.

Often small firms have problems of not getting the benefit of government schemes and policies and in some cases, they even don't know that there are schemes for them. And in a few cases, despite knowing the schemes, they don't avail those schemes as it takes a lot of effort and follow-up to get the benefit. Small firms can avail services of various consultants to get benefits government schemes. These are some of the steps required for small units to start as a change. And this is the high time for a change, otherwise, they will have more difficulties.

(The author owns a garment manufacturing setup in a rural area, which employs mostly women workers)