MSMEs need to adopt innovative approaches in their operations. They should be innovative, inventive, international in their business outlook, have a strong technological base and competitive spirit.
There is a need for various progressive credit policies and practices, new schemes to support the MSME sector for the promotion, development and enhancing the competitiveness of these enterprise, preference in Government procurements to products and services of the micro and small enterprises.
More effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises and simplification of the process of closure of business.
There is a need for the MSMEs to incorporate the latest technology into their production process as well as in their financing, marketing and management functions, to cut down the cost, gain efficiency and consistency.
It is essential that SMEs invest in technology and digitization for better efficiency and productivity. Given the importance of SMEs for Indian economy, conducive policies should be framed so that industry is able to take the advantage of the opportunities of the Fourth Industrial Revolution.
The problems faced by MSMEs need to be considered in a disaggregated manner for successful policy implementation as they produce very diverse products, use different inputs and operate in distinct environments.
In general, there is need for tax provisions and laws that are not only labour-friendly but also entrepreneur-friendly. More importantly, there is need for skill information and continuous upgrade both for labour and entrepreneurs.
While the government has to strengthen the existing skilling efforts for labour, there is an urgent need for managerial skill development for entrepreneurs running MSMEs- an area that is considerable neglected.
Further, the government could consider dedicated television and radio programmes, similar to agriculture, to help educate entrepreneurs running small businesses.
The sector has a wide range of stockholders including the regulators, facilitators and the beneficiaries. The various stakeholders include:
MSME (both existing and prospective).
Large enterprises including multinationals.
Entrepreneurship and skill Development Institutes.
Research and Development Institutions.
Increasing the efficiency of the MSME sector depends on strengthening the following three pillars: