Small firms with high value and growth
The strength of a country's economy comes from small firms which grow very fast into medium and then into large and global corporations. These firms have got power to transform the industry in which they operate, economy and society at large. Great American firms like Wal-Mart, Microsoft and Apple and Google were quite small at some point in time but grew very fast due to great product and service offerings, turned into medium level firms and then large corporations with global impact and reach.. They have transformed the industry and have brought huge benefits to American economy and society. Same goes for companies like McDonald's ,HP, Dell , Facebook and Amazon. They all started as small firms but grew very fast. There is a particular ecosystem which nurtures this kind of growth of small firms in the US. Small firms need all kinds of support from system in order to disrupt the existing structure . They bring in new energy and new way of doing things. But they also encounter the barriers to their innovation. These companies are shining examples of dynamism of American economic structure There could also be visionary like Steve Jobs who founded firms like Apple and Pixar, starting out twice as very small but went on transforming Computer, Telecom, Animation film and Music Industry. But the support from the eco system was immense in terms of developing technology, providing seed capital and capital for sustained growth and also availability of trained people and free market. US spending on research and development is almost 3 % of its large GDP. Along with its excellent universities , the eco system fosters innovation and entrepreneurship. .
India needs these kind of firms in most of the sectors which will transform industry as well as society with huge economic payoffs and benefits . In last 20 years , small Indian firms have also grown fast and have transformed industry and society in a big way. Infosys, Wipro , Satyam, Cognizant , Polaris and many such companies brought IT and ITES revolution in India. They started small but grew very fast in size and value. In telecom, the rise of Airtel tells the same story. In Pharmaceutical, Dr. Reddy's lab, Sun Pharma and CIPLA and many others have made impressive impact on industry. In FMCG, Marico. Dabur and Emami . in construction , GMR,, in media NDTV and Zee ,in E commerce , Flipkart and Snapdeal have shown the way. But these examples are few and far between. To increase the number of such firms, we need to improve the eco system which promotes the high value small firms.
Small firms with high growth and value don't appear on the scene automatically. One of the reasons for slow growth of Indian economy and industry that our SMEs (Small and medium enterprise) are very weak in terms of cutting edge technology, design ,branding and modern management practices. The eco system in India is that they are condemned to remain small and medium for most of the time of their existence. That inhibits growth and development of modern economy.. The government policies and the eco system of raising finance, barriers to innovation, underdeveloped market and deep distrust of businessmen are few factors which inhibit the small firms to grow very fast in size and value.
But things are changing with the help of internet and also with younger generation . The government has also realized that the SMEs create more jobs than the big block buster investment. The ecosystem is getting created where small firms can grow reasonably fast. This entrepreneurial revolution is going to show results with the help of improved eco system of entrepreneurship and innovation..