Technology for MSMEs: Technology upgradation and modernization is rather a perennial objective of Indiaβs SSI policy up to 2006, and that of MSME policy since 2006. However, we have not achieved much success on this front, either at the national level or at any of the regional levels.
Technology for MSMEs: Technological obsolescence and sub-optimal scale are two critically distinguishing features of Indian MSMEs, which predominantly consist of micro, informal enterprises. Therefore, policymakers in India have two persistent challenges to the modernization of the MSME sector in the country, namely, first how to accelerate technological upgradation and modernization of more and more MSMEs?, and second, how to enable more and more MSMEs to expand their scale of production (for their gradual growth)?
While these two challenges hold good for the entire MSME sector, they are intense in the context of micro-enterprises, both in urban and rural India. In fact, both these challenges are interlinked. If Indian policymakers succeed in inducing a steadily increasing number of MSMEs to go for modernization and technology upgradation, it is likely to result in their expansion of scale. Alternatively, if more and more MSMEs are encouraged to go for scale expansion, it is likely to lead to their modernization and technology upgradation. In other words, it is unlikely to achieve one without the other.
Technology upgradation and modernization is rather a perennial objective of India’s SSI policy up to 2006, and that of MSME policy since 2006. However, we have not achieved much success on this front, either at the national level or at any of the regional levels. Resource deficiency in the MSME sector at large is largely perceived to be the major responsible factor for this. Given their weak internal resources, they are unlikely to appeal to and win over external financiers (private or public). Given this, it is necessary to ponder over what can foster MSME scaling up and how to finetune our MSME policies accordingly. The scaling up of MSMEs is key to enhancing productivity and achieve inclusive growth. In many countries, enabling MSMEs to seize growth opportunities over time is a policy priority to address low productivity growth and widening wage and income gaps.
One way of dealing with resource deficiency is to encourage ‘digitalization’ through the adoption of ICT tools to aid production and marketing. Recent evidence (in the context of OECD countries) shows that the use of digital tools enables even micro enterprises to access international markets. However, even in developed countries, relative to large firms, SMEs’ uptake of ICT is lower, and they face higher barriers to the adoption of several digital technologies in their operational activities. The adoption of ICT tools in Indian MSMEs is limited, to say the least, though precise statistics are not available.
Reference: https://www.financialexpress.com/industry/sme/cafe-sme/msme-tech-modernization-of-msme-sector-how-to-achieve-scaling-up-and-technological-transformation-of-msmes/2331018/
