Small and medium enterprises (SMEs) have a substantial contribution to economic development in several ways. At present, India has around 13 million SME units. They contribute to around 44% of the manufactured output and employment opportunities for around 60 million individuals. The proper growth of the Small and medium enterprises sector is imperative for the sustainable growth of the Indian economy.
SMEs today have penetrated myriads of sectors across the territory and blooming with grace. From agriculture to manufacturing, they have a presence everywhere. Moreover, they operate their business functions in Tier-1/ Tier-2 cities and villages. Thus, they have a strong role in the urbanisation of the rural Indian sectors.
The socio-economic growth of India owes a lot to the SMEs. However, there are various challenges which SMEs have to face due to the changing landscapes. Various measures have been taken to find solutions to these problems so that they could flourish and grow.
Inadequate capital access
Majority of small and medium enterprises stay behind due to inadequate financial assistance and opportunities available. Insufficient knowledge and less credibility make them fall. The government has been making endeavours to make finances and credits available to SMEs.
Insufficient talent and manpower
Operating in Tier1 or 2 cities and villages, SMEs do not have talented professionals and adequate manpower. This restricts them from leveraging the technological and digital benefits.
Lack of infrastructural and production facilities
Another challenge which SMEs face is infrastructural and manufacturing facilities. Automated machines, latest technology and mechanized equipments are not available in the remote areas from where they operate. Thus, it restricts their growth in the changing scenario.
Less marketing knowledge
Villages and semi-urban cities lack adequate access to digital and technological information. They possess insufficient knowledge to leverage the power of digital marketing. This, in turn, acts a downside which restricts them to grow.
High technology and digital gap
Places in which SMEs operate have inadequate and insufficient availability and access to technological and digital resources. Also, the expenses incurred on technology refrains them from adopting it. Therefore, SMEs operate locally or with limited technical knowledge and access.
Ineffective innovation and creativity
Next most challenging and difficult factor stands as the lack and insufficiency in innovation and creativity. Mostly, SMEs run with traditional practices and principles instead of the latest trends and practices which leave them behind.
These challenges restrict the SMEs to unleash its calibre and capacity. SMEs are incapable of soaring to the standard mark of their international counterparts. Such challenges act as hurdles for them to become sustainable and nurture through the odds.
On a positive note, these challenges pave way for the SMEs to grow and widen their business prospects. Government has been making constant efforts to empower and support SMEs to break the challenging stones. Government bodies encourage and provide financial assistance as well to help them grow.
Small and medium enterprises sector have diverse growth prospects awaiting them. The only mediums to uncover their potential and growth are adaptability and technology.