The MSME Challenges
Abhishek Pattnayak
![Abhishek Pattnayak]()
Abhishek Pattnayak
Marketing & Growth Leader in SaaS, EdTech, IT Services and Products | Generated Over $600 Mn Revenue Cumulatively | Entrepreneur
Before I get to the challenges, here are certain much known/unknown statistics -
- As per the 6th Economic Census 2013 and results published on 31st march 2016, there are 512.99 Lacs or 51.29 million MSMEs (Registered) in India (* Source MSME India) and employing over 111 million people.
- 86.28% of the MSMEs are owned and operated by Male whereas only 13.41% are owned and operated by women in India.
- 78.2% of non-agri MSMEs are self-financed, of which 72.7% are in rural areas and 83.7% are in urban areas.
- 39.44 Million SMEs, 87% are private proprietorship based. These MSMEs are the core to the entire MSME sector in India.
- MSME sector (Non-Agri) contributes about 30.74% to India's GDP, next to agriculture and Agri-driven businesses.
With such huge numbers of MSMEs, while it's a great feeling and confidence that we are in the right path of economic strength, there are certain challenges MSMEs face regularly, which either slows down their progress or breaks their confidence to scale more.
Challenges -
- Right Marketing & Promotion
- Strategic Business Development
- Financing & Working Capital
- Lack of Involvement of Women Entrepreneurs
- Lack of Partnerships & Growth Guidance
- Hiring the Right Talent & Skilled Labour
- Bureaucratic Delays
- Business/Investment Protection Schemes and Policies
I would write more about these challenges and some ways to overcome these challenges in my next articles.
What are the other challenges and ways to solve these challenges? If you want to contribute your ideas and share your thoughts, please do so! I would publish your thoughts and ideas in the upcoming articles, with full credit to you!
Think different...
7 年Abhishek Pattnayak I think you have nailed it very well. For MSEMs, there are mountains of challenges, not to forget the lack of skills to leverage digital technologies, which today have become not only the information highways but also the trade routes for large scale businesses. Just to illustrate, a brother who is at the border doing his duty and unable to attend a festival event, today is able to go online and book a gift for his sister and parents and get it delivered at a local town where it gets picked up by someone in the family. This is how the cheese is getting moved away from the local businesses whilst they try to vehemently protect the status quo and are unwilling to make a change. While it's about all other factors, it also about the reluctance to ring into the new. Within next 10 years, almost 80% of the population would be connected into the digital world, but are the businesses seeing this coming? The other key factor is, the local talent is migrating to the richer cities (which in fact are far poorer when you balance the inflation out) and what is left in rural areas is unskilled talent which not only adds to inefficiencies but also has not innovation potential. That leaves these MSEMs no room to improve and except being pushed into price arbitrage they are helpless and withering away. They are throwing more man power against challenges and problems and that is adding more fuel to the issues. Lastly with a disconnect with the fast moving global world, there is absolute vacuum in terms of knowledge sharing, best practices and awareness of up-scaling and up-skilling their resources and talent. They can certainly make a comeback, but only if they adopt a digital work style and a digital life style, and not only that, they will make the bigger organisations fight much much harder to win the local market and consumers.