MSMEs are the driving force of national innovation. Their size and strategic position make them ideal for developing components and connections that large enterprises can commercialize into groundbreaking products and services.
Micro, Small, and Medium Enterprises (MSMEs) are the innovation engines of the global economy. In the past 25 years, they have created 12.9 million jobs in the US, accounting for 66% of employment growth and nearly two-thirds of new private sector jobs. In China, SMEs represent 99% of all enterprises, contribute at least 60% to GDP, and generate over 82% of employment opportunities.
India boasts the largest SME market globally, with 75 million registered SMEs, projected to grow to 95 million or more in the coming years. In the fiscal year 2021-2022, MSMEs contributed 29% to India’s GDP, accounted for 45% of total industrial production, and 40% of total exports valued at $200 billion in 2022-23. Despite significant efforts by central and state governments to support MSMEs, the impact has fallen short, with nearly 13,000 SMEs shutting down in the last financial year.
MSMEs are the driving force of national innovation. Their size and strategic position make them ideal for developing components and connections that large enterprises can commercialize into groundbreaking products and services. There is a significant global opportunity for MSMEs, especially in India, to revitalize their role in the innovation ecosystem and counter their declining relevance. This involves integrating new materials like nanotech and biotech, as well as adopting resources such as 3D/4D printing, IoT, scanners, sensors, robotics, and renewable energy sources like wind, solar, and nuclear power.
We are entering a new era where innovation means simplifying legacies, modernizing processes, and creating disruptive impacts through digital technology. MSMEs should blend technology with a human touch through learning, training, experimentation, execution, and evaluation.
Learning: Formulate questions to align enterprises with data that reinforces their positioning and priorities.
Training: Develop new ecosystem processes to guide decision-making based on systemic and systematic innovation.
Experimenting: Implement intelligent infrastructure for fearless experimentation within global Communities of Interest (COI) and Communities of Practice (COP).
Performing: Build next-generation engines, components, and connectors for personalized commercialization.
Measuring: Focus on value creation rather than value extraction.
A substantial reinvention process is needed to envision a future different from the current one. SMEs must act now to stay relevant in the value chain. Many SMEs are family-owned businesses passed down through generations.
Startups should view themselves as MSMEs, avoiding the pursuit of high valuations and unicorn status. Instead, MSMEs should enhance their value with returns on assets deployed (ROAD). A glocal workforce strategy is paramount for success. The new generation of leaders must embody the five A’s: Aspiration, Agility, Anticipation, Authenticity, and Ability.
Glocality is 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, attracting global talent. Despite geopolitical obstacles, the direct human connection remains unwavering. Work needs a fresh definition from the past. Enthusiasm for creation should motivate the workforce, and workplaces should foster open innovation. This vision should materialize in:
Fresh Structures: Reimagine working/reporting relationships, along with a new approach to rewards, recognition, and celebrations.
Innovative Synergies: Foster open shared collaboration, renewing culture, and updating values through modernized ecosystem processes.
Modernized and/or Disruptive Systems: Implement digital tools to enhance access, distribution, and global reach.
In 1988, Andy Grove, then Chairman of Intel, authored “Only the Paranoid Survive,” demonstrating how he revolutionized the microprocessor industry by directly engaging consumers and emphasizing “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 Intel were an MSME, there would be a remarkable opportunity to produce chips with features like autonomy, personalization, privacy, and security, independent of networks. Such 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 market approach amidst stock challenges and workforce reductions, which are antithetical to creating a global workforce strategy that is strategically relevant today.