The MSME sector has been an integral part of the economy contributing to GDP, employment as well as exports. The micro, small, and medium enterprises (MSMEs) sector contribute about 30% of India’s GDP and accounts for almost 45% of exports.
From 2020 to early 2022, the MSME sector has witnessed tough times, more so because of the pandemic. Today, several of them have started recovering but there are many of them yet to recover. Many companies suffered due to financial problems, high input costs, demand management, supply chain management/logistics, obsolete technology, infrastructure, taxation, etc.
It is, therefore, necessary to plan for efficient and effective operations of MSMEs. The areas that require focus are restructuring, management of finances, proper technology inputs, smart manufacturing, effective marketing and global perspectives, efficient management & strategies, and finally it’s the decision-making backed up by data.
To ensure operational excellence, it is crucial to implement proactive actions. Some examples of such actions include hand-holding with the government in policy-making, effective long-term contracting with large OEMs fuelling future growth, planning for finance to cope with rising demand and high growth rates and of course ‘Think Local Act Global’.
The path to recovery for the ones recovered has been phenomenal and the industry is looking up to a much better future. To cope with this growth, we need to manage our finances well and create an organisation that could easily absorb such positive signals. One of the strategies for achieving significant growth in technology, markets and manufacturing is creating JVCs or technology transfer agreements. A joint venture involves two or more businesses pooling their resources and expertise to achieve a particular goal. What makes this interesting is that the risks and rewards of the enterprise are also shared.
The reasons behind forming a joint venture include business expansion, development of new products, or moving into new markets, particularly overseas. A business may have strong potential for growth, and the owner may have innovative ideas and products. However, a joint venture could give you more resources, greater capacity, increased technical expertise and access to established markets and distribution channels.