PREFACE

MSME sector in today’s scenario is an extremely contemporary area of discussion. Normally,

branding and technology typically have been associated with high technology companies, where
continuous innovation and high investment in R&D makes the industry more reflective in nature.
MSME’s on the other hand, traditionally have relied more on a feeder role and has played the task of
being support rather than being a medium. However, this is not to mention that most success stories
in high-tech companies have originated from a MSME background.

Today, in most Original equipment manufacturer (OEM) or replacement markets the final product
has a value chain which runs deep into the system and MSMEs are an integral part of the
value chain. Especially for technology products it holds greater relevance owing to the heavy
reliance on the ancillary industry for either as an after sale medium or pre-manufacturing
stage.

In this background looking at the issues and challenges in the context of technology branding for MSMEs
becomes quite relevant and dynamic. Globally, there are enough evidences of companies or
clusters where the MSMEs have been exploring the possibility of branding in MSME’s and
specifically in technology companies. This is imperative in the long run as it helps to fetch a
better price and even develop a loyal base of customer.
 Contents

Abstract

Introduction

Importance of MSMEs to Indian economy

TECHNOLOGIES USED IN MSME

MSMEs: The Engine of Growth (Government Role)

SIDBI: A Key Player in the MSME Sector

Types of Cases

Case 1 GEDA (Gujarat Energy Development Agency)

Case 2 Sun and Diamond Formulation - SME Success Story

Case 3 Feature Entrepreneur - Nandan Nilekani - co-founder of

global software

Recommendation

Conclusion

References
 Abstract

With an impressive history of small firm development

policy, in post-Independence India MSMEs dominate the industrial scenario
through its contribution to generation of employment and income as also
tackling the problem of regional disparities. Given the imperatives of
globalization, although in certain sectors strong external orientation could be
observed even by the early 1980s, it is since 1991 that the small firm policy
(and since late 2006, for the MSMEs, including the ‘medium’ for the first
time) in India has been keenly pursuing policies that emphasize the
importance of internationalization, trade and inter-dependence in the
spheres of innovation, learning, market and business strategies. An
examination of the performance of the small enterprises has been attempted
here, underscoring the unimpressive performance and composition of
exports and the widespread efforts at MSME cluster promotion without a
sound regional development perspective. Despite an elaborate and dynamic
policy framework, the progress of Indian MSMEs continues to be hindered by
some of the basic constraints as poor credit availability, low levels of
technology (hence, low product quality and limited exportability) and
inadequate or no basic infrastructure, both physical and economic. It is too
early to assess the impact and effectiveness of a plethora of new policy
measures, announced very recently. Through a brief case of the garment
sector some of the concerns (including terms of employment) regarding
linking with global production networks has been presented. A case for
proper implementation and following up of numerous schemes has been
made, as also to develop policy-sensitive database for both MSMEs as well as
clusters. The challenge to policy lies in broad-basing benefits to MSMEs
across space and sector and also keeping the decent employment
generation role of MSMEs in focus.
INTRODUCTION

Small enterprise promotion has continued to remain an important and

integral part of Indian development strategy much before the First Five-Year
Plan, even dating back to 1938 when the National Planning Committee
documents were being prepared. The concerted policy emphasis upon small
firms as a vital vehicle of progress draws upon this sector’s crucial historical
role in generating substantial employment and income at the regional level
and acting as a shock-absorber during periods of economic crisis.

The small enterprise sector has continued to contribute immensely in

creating large scale job opportunities across space and, in the process,
helped reduce inter-regional and rural-urban disparities in growth. The
remarkably diverse range of products manufactured in this sector (estimated
to a staggering over 8000 distinct products), often available at affordable
prices, has successfully catered to a calibrated yet vast domestic market.
Certain products in this sector have also been consistently figuring in the
export basket during the recent decades, although the export performance
in the global market has been unimpressive.

After pursuing at least four decades of ‘controlled’ industrialization –

protecting infant industry and supporting an import-substitution strategy – in
1991, through the formal pronouncement of economic reforms of the Indian
economy, the hitherto protected small enterprise sector began to come to
terms with the imperatives of globalization. An increasing emphasis upon
external orientation, competitiveness and networking with agencies within
and beyond the sector and nation seemed to have been the bedrock of
current policy paradigm; the recent policy framework corroborates this
notable shift in focus. It may, however, be pointed out at this stage that till
as late as October 2006, by when the Micro, Small and Medium Enterprises
Development (MSMED) Act came to be legislated; the ‘medium’ category
never had been formally defined; albeit, especially, in certain sub-sectors
and regions many dynamic small enterprises had been operating at a much
higher level of investment in plant and machinery and market reach.
In India, the Micro and Small Enterprises (MSMEs) sector plays a pivotal role in the overall
industrial economy of the country. It is estimated that in terms of value, the sector accounts for
about 39% of the manufacturing output and around 33% of the total export of the country.
Further, in recent years the MSME sector has consistently registered higher growth rate
compared to the overall industrial sector. The major advantage of the sector is its employment
potential at low capital cost. As per available statistics, this sector employs an estimated 31
million persons spread over 12.8 million enterprises and the worker intensity in the MSME
sector is estimated to be almost 4 times higher than the large enterprises.

Sectors/ Sub-Sectors of engagement

The NMCC has identified the following sectors/ sub sectors.

• Textile and garments

• Leather and Leather goods
• Auto Components
• Drugs & Pharmaceuticals
• Food Processing
• Telecom Equipments
• Gems And Jewellery
• Fertilizers
• Minerals & Metals
• Handlooms and Handicrafts
• Chemicals & Petrochemicals
• IT hardware / electronics
• Skill Development
• Ports & Shipping industry
• Capital goods industry and
• Paper industry
• Biotechnology
• Cement

Importance of MSMEs to Indian economy

SMEs are officially defined and exclusively identified for promotion in the
manufacturing sector of most national economies. The most important
justification for the exclusive promotion of SMEs is their potential for
employment of India has officially defined a small-scale enterprise under the
Industries Development and Regulation (IDR) Act, 1951, in terms of upper
limit of original investment in plant and machinery at Rs.10 million. But the
recently introduced Small and Medium Enterprises Bill, 2005 (SIDO, 2005)
has proposed a definition of a medium enterprise in terms of investment in
plant and machinery in the range of Rs.50 million to Rs.100 million and
proposed to revise the upper investment limit for a small-scale enterprise to
Rs.50 million. If this definition is accepted, then SMEs would cover all
enterprises having investment in plant and machinery up to Rs.100 million.

But there is no single source of data, which provides statistics on the size
and composition of SMEs in India. The Annual Survey of Industries (ASI) is the
most comprehensive and reliable source of data on Indian industry covering
registered factories. But, this source excludes unregistered or unorganized
manufacturing enterprises, which is critical to any compilation of statistics on
SMEs. According to ASI, SMEs account for a major share of registered
factories, employment, production and gross value added in Indian industry.
In
1989/90, SMEs accounted for more than 93 per cent of registered factories,
66 per cent of employment, almost 52 percent of the value of production and
about 44 per cent of the gross value added. But by 1996/97, the share of
SMEs declined marginally in terms of the number of factories and
employment, and considerably in terms of value of output and value added.

SMEs in India have traditionally been present for a long time and especially the India growth
pattern has had a large contribution from this sector. Sometimes acting as feeder to the larger
industries (auto components), sometimes operating as clusters to push for the entire sector
(Handloom/Handicrafts/Textiles) or sometimes the entire sector contributing immensely towards
the growth (electrical/electronics/software) have thrown enough instances of success. Some of
the larger organizations today, across sectors have also started with the SME story, eventually to
move on for bigger investments. A Delhi based company Havell’s is one such story, where the
brand has had a phenomenal rise, particularly in the last five years (aided by the growth in real
state and construction industry).

In India, industries having investment in plant and machinery less that Rs. 10 million are called
small-scale industries (SSI). There is no formal definition for medium scale industries but
according to some studies, industries having investment between Rs. 10 million and 1000 million
in plant and machinery are termed as medium scale industries, (MSI) (Karandikar, 1999). In
India, while small enterprises are clearly defined, there is no clear definition of medium
enterprises (FICCI 2002). The official category that corresponds to small enterprises is that of
small-scale industries, or SSIs. An SSI unit is broadly defined in terms of value of investment in
plant and machinery. At present, a unit which has investment in plant and machinery up to Rs.10
million is defined as an SSI unit (NCAER 2001). A unit with an investment of up to Rs. 2.5
million came into effect from October 2, 2006, define SMEs on the basis of investments in plant
and machinery.

For enterprises engaged in the manufacture of goods:

Micro - Investment in plant and machinery is considered a tiny enterprise. In the case of service
and business enterprises, the investment limit is Rs. 1 million for fixed assets excluding land and
buildings (www.smallindustryindia.com).
• The Micro, Small and Medium Enterprises Development Act, 2006, which machinery
less than Rs. 2.5 million.
• Small - Investment in plant and machinery over Rs. 2.5 million but not exceeding Rs. 50
million
• Medium – Investment in plant and machinery in excess of SSI limit but less than Rs. 100
million

For enterprises engaged in providing or rendering of services:

• Micro - Investment in equipment not exceeding Rs.1 million
• Small - Investment in equipment over Rs.1 million but not exceeding Rs.20 million
• Medium – Investment in equipment is in excess of SSI limit but less than Rs.50 million

SMEs always represented the model of socio-economic policies of Government of India which
emphasized judicious use of foreign exchange for import of capital goods and inputs; labour
intensive mode of production; employment generation; non-concentration of diffusion of
economic power in the hands of few (as in the case of big houses); discouraging monopolistic
practices of production and marketing; and finally effective contribution to foreign exchange
earning of the nation with low import-intensive operations. It was also coupled with the policy of
de-concentration of industrial activities in few geographical centers. It can be observed that by
and large, SMEs in India met the expectations of the Government in this respect. SMEs
developed in a manner, which made it possible for them to achieve the following objectives:
• High contribution to domestic production
• Significant export earnings
• Low investment requirements
• Operational flexibility
• Location wise mobility
• Low intensive imports
• Capacities to develop appropriate indigenous technology
• Import substitution
• Contribution towards defense production
• Technology – oriented industries
• Competitiveness in domestic and export markets

At the same time one has to understand the limitations of SMEs, which are:
• Low Capital base
• Concentration of functions in one / two persons
 • Inadequate exposure to international environment
• Inability to face impact of WTO regime
• Inadequate contribution towards R & D
• Lack of professionalism

TECHNOLOGIES USED IN MSME

CUSTOMER RELATIONSHIP MANAGEMENT

Tools that companies used to interact with customers which includes employee training and
special purpose CRM software.

KNOWLEDGE MANAGEMENT SYSTEMS

Tools for managing knowledge in organizations for creation, capture, storage and dissemination
of information to allow employees to have access to company data.

ENTERPRISE RESOURCE PLANNING

Systems, which is intended to manage all the information and functions of a business or
company from shared data stores.

ONLINE COLLABORATION TOOLS

These include Google Docs, ZOHO Docs etc, and can help with complicated tasks involving
multiples people, deadlines and activities.

INFORMATION SECURITY

Tools which help to secure the data for protect information and systems from unauthorized
access.

SOCIAL NETWORKING SITES

Excellent low cost marketing tools, which help you, reach your customers like Twitter, LinkedIn.

PAYROLL MANAGEMENT TOOL

To handle the complicated payroll systems and also create an effective compensation system.

SEARCH ENGINE OPTIMISATION TOOL

Techniques which help in improving the volume or quality of traffic for a web site from search
engines via natural or un-paid search results.

ONLINE CONFERENCING AND COMMUNICATION

Uses Internet as conference venue so that participants can access the conference from anywhere
in the world.

SaaS/PaaS

A pay per use model where companies may host the application on their own web servers or
download the application to the consumer device.

SME LOOK FOR SILVER LINING IN CLOUD COMPUTING

Cloud computing is Internet-based computing, whereby shared resources, software and

information are provided to computers and other devices on-demand, like electricity.

The use of a Web services such as Flickr, Google Docs, Jing (video screencapture service) to
perform the functions that were traditionally done with software installed on an individual
computer.

Cloud computing help in using computing sources more efficiently for changing the way
enterprises look at their IT hardware and software requirements. It is a mix of technology
and delivery models that treat Infrastructure as a Service (IaaS), Platform as a Service
(PaaS) and Software as a Service (Saas) and use the internet for delivering services to the
end-user.

This means that access to infrastructure are delivered cheaply and efficiency over the Internet.
And more importantly a business is billed according to usage, thereby reducing cost.

Increasing cost pressure on managing processes manually as well as the need to be more efficient
in order to be more competitive in India; many SMEs are now in the process of setting up an
IT infrastructure. At this point, adoption of cloud computing can be of great advantage since
it will mean no additional cost of migration due to lake of existing infrastructure and faster
turn around on investments.

The Google offers an application called Google Sites that is an easy way to create secure web
pages for intranets and team projects, and an application for private, hosted video sharing.
MSMEs: The Engine of Growth

THE ROLE OF MICRO, small and medium enterprises in the economic and social development
of the country is well established. The MSME sector is a nursery of entrepreneurship, often
driven by individual creativity and innovation. This sector contributes 8% of the country’s
GDP, 45% of the manufactured output and 40% of its exports. The MSMEs provide
employment to about 60 million persons through 26 million enterprises. The labour to
capital ratio in MSMEs and the overall growth in the MSME sector is much higher than in
the large industries. Considering the crucial role of equity and inclusion, several important
initiatives have been taken by the government in recent years.

For enhancing the competitiveness of MSMEs, the government has initiated innovative schemes
National Manufacturing Competitiveness Program (NMCP) to improve the processes,
design, and technology and market access.

Ten elements have been identified for attention as part of its long term manufacturing strategy,
these are:

• Enhance Government focus on manufacturing competitiveness;

• Create conditions for investments and growth of the manufacturing sector;
• Lower the cost of manufacturing;
• Invest in innovations and technology;
• Strengthen education, skill building and training at all levels;
• Adoption of global best practices in manufacturing;
• Provide the right market framework, competition and regulation;
• Enable competitiveness of small and medium industries;
• Enable public sector manufacturing industries to meet competitive market conditions; and
Infrastructure development.

The government has introduced the Prime Minister’s Employment Generation Programme
(PMEGP), which provides attractive levels of subsidy to the potential entrepreneurs for
setting up new microenterprises in the manufacturing as well as service sector.

THE TASK FORCE has recommended setting up of appropriate institutional, legal and
regulatory structures to create a conductive environment for entrepreneurship and growth of
MSMEs in the country. The task force has also emphasized active support of the state
governments in providing adequate infrastructure including land, power, roads etc. which is
critical for the MSMEs to grow and prosper.
SIDBI: A Key Player in the MSME Sector

Small Industries Development Bank of India (SIDBI) was set up in 1990 under an Act passed by
Indian Parliament as the Principal Financial Institution for Financing, Promotion and
Development of industries in the small scale sector and to coordinate the functions of other
institutions engaged in similar activities.
Since its inception, SIDBI has been endeavoring to meet the diverse needs of the MSMEs
through the tailor- made schemes and fulfil its Mission and Vision as stated below:

Mission - To empower the Micro, Small and Medium Enterprises (MSME) sector with a view to
contributing to the process of economic growth, employment generation and balanced regional
development.

Vision - To emerge as a single window for meeting the financial and development needs of the
MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the
preferred and customer-friendly institution and for enhancement of shareholder wealth and
highest corporate values through modern technology platform.
Direct Finance

Term Loan Assistance – For setting up of new projects & for technology up-gradation,
diversification, expansion etc. of existing MSMEs, for Service sector entities & infrastructure
development & up-gradation.
Various other schemes e.g. working capital, Inland Letter of Credit, Guarantee Scheme, Equity
Support, Vendor Development Scheme & bill discounting facility etc.

Equity Assistance Scheme - SIDBI has introduced a scheme for providing equity assistance to
well performing MSMEs as a value added product to fill the gap in total fund requirement after
raising promoters equity and secured loan . The support is considered towards businesses set up
by entrepreneurs with track record.

Strategic Business Initiatives – Vendor Development Scheme provides finance for capital
Expenditure, Working Capital Term Loan & Customized invoice discounting/Bill discounting
facility.

Eligibility Criteria for Units (Direct Assistance)

1. New/Existing MSME units having satisfactory track record of past performance.

2. Energy Saving Sub-Projects eligible under this initiative are:

a. Acquisition (including lease and rental) of energy saving equipment / facilities,

including newly installed, remodeling and upgrading of those existing
equipments.
 b. Replacement of obsolete industrial furnaces and / or burners etc, or introduction of
additional equipment which would improve performance.

c. Installation or improvement or adoption of such manufacturing machinery and

equipment that meets the specific requirement for energy performance standard,
provided by the related Energy Conservation Act / Code in India (eg: Top Runner
Equipment, Energy Labels etc.)

d. Installing of building envelopes, equipment heating systems, lighting and electrical

power/ motors in compliance with the energy performance standard provided in the
Energy Conservation Building Code [ECBC].

e. Introduction of equipment that utilize alternative energy sources such as natural gas,
renewable energy, biogas etc., instead of fossil fuel such as oil and coal etc., to
help reduce GHG emissions. Clean Development Mechanism (CDM) Projects at cluster level
that involve a change in the process and technologies as a whole, duly supported by
technical consultancy.

g. List of energy saving equipments is available on SIDBI website (www.sidbi.in).

Types of Cases

Case 1

GEDA(Gujarat Energy Development Agency)

SOLAR POWER GENERARATING SYSTEMS AT THE MILK COLLECTION

CENTRES OF PANCHMAHAL DAIRY

Dairy industry in India is developing at faster rate. However rising cost of inputs in dairy
industry such as milk, fuel and electricity is one of the major constraints. The milk collection
centres cannot be operated in rural areas due to unavailability or lack of electricity. To overcome
these difficulties a Solar Photovoltaic Power Generating System can be utilized for providing
continuous uninterrupted power and operation of Milk Collection Centres.

In this direction Shri Bhupendrasinh P. Solanki, Member of

Parlianment (LS) and Chairman, Panchmahal Dairy, Godhra had
already taken a initiative and contacted the Ministry of Non-
conventional Energy Sources, Government of India, New Delhi
with the proposal. The MNES had favourably considered the
proposal and sanctioned 10 nos. of Solar Photovoltaic Power
Generating Systems vide their sanction letter no. 32/66/2000-
2001/PV-SEG dated 29/12/2000.

The total cost of the 525 Wp system is approximately Rs. 1.70 lacs, including installation,
commissioning, transportation, operation and one-year maintenance and monitoring. The MNES
provides a subsidy of Rs 0.85 lacs for the system.

Objectives

• Sponsor, co-ordinate and promote research programmer or projects for prototype

(demonstration projects) and pilot investigations in the area of new and renewable
sources of energy. Provide technical and financial assistance for formulation of
programmers, designs and projects meant for extension of renewable energy development
in the state.
• Undertake, on its own or in collaboration with other agencies, programmed of research
and development, applications and extension as related to various new and renewable
energy sources.
• Undertake or sponsor, techno-economic/socio-economic feasibility studies/cost-benefit
analysis.
 • Formulate and implement a broad-based programmed for conservation of energy at all
stages, including extraction, conversion, distribution and consumption in all sectors of the
economy.
• Study the environmental effects of all energy-related processes.
• Establish an Energy Resources Centre that will collect and collate energy and inter-
related information.
• Develop and support Documentation Services in area of energy in general and renewable
energy in particular.
• Develop Communication and Education projects for wide spread dissemination of energy
and environmental issues.

Strategies Promoting Renewable Energy

Renewable Energy Technologies and Energy Conservation measures are promotes and popularize through schem

• Socially oriented schemes for urban, tribal and remote and underdeveloped regions.
• Commercially oriented schemes
• Demonstration projects and programmer/schemes
• Aid in the form of subsidies for production and dissemination for RE Technologies
• Entrepreneurial development
• Support R & D Activities
• Information and Education Activities

SOLAR WATER HEATING SYSTEM INSTALLED AT CATTLE FEED FACTORY KANJARI,

A Solar Water Heating System of capacity 54000 Lits/Day has been installed and commissioned at Cattle feed F

This system produces 54000 liters of hot water at 60-degree centi. Temperature.

Hot water produced by Solar System is used as pre heated boiler feed water and helps to save about 200 lit of fur

The system consists of 361 Nos. of Solar Flat Plate Collectors, and insulated tank of 54000 lit capacity for storag

This is the single largest solar water heating system in Gujarat installed in a Dairy Industry.

Cost of the system is Rs. 36,10,000/- of which Gujarat Energy Dev.Agency has provided Rs 18,05,000/- as subsi

Case 2
Sun and Diamond Formulation - SME Success Story

Few companies manage to retain its pace of growth in the dreaded recessionary trends. Siomond Pharma is one o

The people at Siomond Pharma believe in transparency as a key to success. They have worked hard to develop a
march ahead in the industry” says Pradeep Thakur, one of three directors at Simond Pahrmaceuticals Pvt. Ltd.

Since their inception in 1999, Pradeep has been taking care of its marketing and finance. As he says, “In Siomon
general administration of the company.”

Siomond Pharma starting as a trading company saw the paradigm shift in their operation a decade ago when they
entrepreneurship. Earlier we were basically a trading company. But in the process of time we had made this com
pharmaceuticals.

Why they chose this name - Siomond Pharmaceuticals? There is an interesting theory behind choosing the name
element on earth. When both are combined Siomond is formed,” says Pradeep.

In order to keep pace with the growth in the industry, they floated another enterprise - Simond Pharma and went
license, job-contracts, and products license basis.
Simond Pharma currently has more than 150 scheduled drugs. Some of them are manufactured by themselves wh

150 Scheduled Drugs

Now Siomond Pharma product profile includes numerous ranges of medicines. They also have their own marketi
marketing team with significant strength of more than 150 marketing men for our products throughout northern I

According to Pradeep, Siomonds has taken to effective marketing strategy through offensive publicity campaigns
have specially trained team to enlighten the doctors about the products, their formulations, indications, specificat
doctors we keep introducing innovations,” Pradeep says

Right Formulations

In pharma business, right and effective formulations are the key factors. “Many companies have their own formu
drug pharmacopeias from where we take the references. We also take the references from the multi-national com

As far as R&D is concerned, Siomonds being an SME, has yet to establish its own full-fledged and well-equippe
their production unit at Haridwar has its own R&D facilities and they are in the process to establish another unit

Many SMEs in the pharma sector are joining hands with their global counterparts. Siomond Pharma is not far too

Even SME WORLD also suggested the name of Siomond Pharma to a German pharma company about which Pr

Ambitious Planning
Siomond Pharma has ambitious planning and appears to make a headway in the international arena too. “ Financ
IPOs. We have a clear vision and by 2014 we hope to grow by leaps and bounds.”

Praeep Thakur also hopes to be listed on SME Exchange which is much awaited on the SMEs platforms. “SME E
that will easily attract the investors,” he says.

About the growth of the Siomond Pharma and international activities, the auditor of the company Ramesh Kama
events and recently participated in trade events in South Africa and Vietnam.”

Case 3

Feature Entrepreneur - Nandan Nilekani - co-founder of global software

As the co-founder of a $ 4.66 billion global software giant, what is Nandan Nilekani's own worth as of today, hav
conservative estimates, based on the amount of stocks he holds in the Infosys.

In 2006, and as recent as this year (2009), TIME magazine had listed him as among the world's 100 most influen
Schumpter Prize, the only alumni of IIT, Bombay to have got it.

At 54, the Sirsi born it's in Uttara Kannada in Northern Karnataka, he has moved from his own stylishly designe
assignment, in his words: “No country in the word has done what we embark to do.”

He will head the Unique Identification Development Authority of India to track down to the remotest corner and
memory serves me right, he was the Chairman of the Bangalore Task Force (Toilet Location/Garbage Disposal )

His CV (with the Department of Personnel) lists his involvement in commissions and committees at Centre. Crow
bureaucracy, where it unusual to see a breach into the rigidit silence of the snobs.

The author of this article sourced that on June 26 last, at a Cabinet meeting, the Prime Minister Dr Manmohan Si
working under the Planning Commission and 4) his ONLY condition had been accepted; A Cabinet rank !

As news spread, the “Bill Gates of Bangalore” was cheered..Till then he was overseeing an 80-acre campus in So
Infosysite: “Nandan Nilekani will be out there pursuing a greater cause.”

His peers interpreted the most educated Prime Minister's bold move as a “tribute to India's growing confidence in
reward challenge that is as significant as founding Infosys.”

Wipro Chief Financial Officer S.Senapathy hailed it as a “move which would serve as a good beginning for more
politics of it. No country has done what we are embarking to do.”

India's software supreme laced his wisdom with wit : “There is not going to be any conflict of interest because I h
from the decision.” ( After all, he had beaten pavements in the US?).

In the US, it was for Infosys. At home, it would be for discovery, or succinctly put rediscovery of India. Nandan
India 'Unique National Identification' abroad: Agra's Taj Mahal.

What precisely would the Unique National Identity do ? An editor, a contemporary of mine in the 1980s, has wo
happier if he had said so what if the UPA-II has stolen the NDA-II thunder ?

Nilekani has no set deadline. It is hoped the task master in him would have it all ready by 2012. Here, the bigges
legtimate assessees to re-apply for new no. Not music for Nandan's e
Increase institutional collaboration
Stronger collaboration between Chambers of Commerce and Trade and the various manufacturing associations would

Improve the image of the clusters

Changing the image of the clusters with both internal and external developments and assistance, would be an importan
entrepreneurial image, the government and Trade bodies should promote key specific strengths or 'magnets of attracti

Role models
Successful local SMEs should be profiled and publicized. They should be described as 'profiles of success'. Approach
made and interviews on TV/radio. It is useful to emphasise the contributions made by these SMEs towards the develo

Increase awareness of opportunities

Special promotions, where not already conducted, and promotional material aiming at increasing publicity and awaren
intensive and continuous. Further, focus on innovative technology branding should be initiated by the respective indus

Expand technology institutions and activities

Given cost structures, SMEs increasingly need to compete on technology and other added value features that give them
Technology Centre and Laser Institute in Mittweida and the InnoRegio activities are examples of key regional institut
support infrastructures necessary for SMEs. In this case, collaboration with other clusters or thematically related highe

Encourage university-industry linkages

Increased enterprise by the academic sectors and stronger links between regionally and locally present higher educatio

Promote business-to-business mentoring

Larger companies can play an important role in encouraging SME innovation and exporting by making available expe

Promote the internationally traded service sector

A strategy and focus by the clusters on the service sector in their regions as a source for internationally traded sector s
representatives of various clusters, government official and especially expert representatives from service business co

Focus on growth enterprises

Industry associations should constantly review the scope of their support to SMEs and seek to focus support in a more

Inter-firm linkages to enhance collective capabilities and competitiveness

Greater scope and more opportunities for inter-firm linkages for enhanced collective efficiency, technological and inn

The challenges

While the advantages of exporting far outweigh the disadvantages, SMEs face the following
challenges when venturing into the international marketplace.
Extra costs
Because it takes more time to develop extra markets, and the pay back periods are longer, the up-
front costs for developing new promotional materials, allocating personnel to travel and other
administrative costs associated to market a product can strain the meager financial resources of
SME.

Product modification
When exporting, companies may need to modify their products to meet foreign country safety
and security codes, and other import restrictions. At a minimum, modification is often necessary
to satisfy the importing country's labeling or packaging requirements.

Financial risk
Collections of payments using the available methods (open-account, prepayment, consignment,
documentary collection and letter of credit) are not only more time-consuming than for domestic
sales, but also more complicated. Thus, companies must carefully weigh the financial risk
involved in doing international transactions.

Export licenses and documentation

Though the trend is toward less export licensing requirements, the facts that some companies
have to obtain an export license to export their goods make them less competitive. In many
instances, the documentation required to export is more involved than for domestic sales.

Market information
finding information on foreign markets is unquestionably more difficult and time-consuming
than finding information and analyzing domestic markets. In less developed countries, for
example, reliable information on business practices, market characteristics and cultural barriers
may be unavailable or very limited.

Small and Medium Enterprises must realize that entering an export business requires careful
planning, some capital, market know-how, a quality product, competitive pricing, management
commitment and realizing the challenges and opportunities of foreign markets. While there are
no hard-and-fast rules that can help companies make decision to export or not and to become
successful, understanding the advantages and challenges of exporting can help a smooth entry
into new markets, keep pace with competition and eventually realize profit.

Conclusion

MSME gives the ability to learn things quickly for getting things done &
produce optimum results. MSME provides employment opportunities to the
people of Rural & Urban areas.