Abstract
Micro, small and medium enterprises (MSMEs) in India have always been looking actively for business and enterprise solutions for commercial improvement in various areas of their operations to bring in more profitability and, in the long–run, sustainability. This includes e-commerce solutions with the technological revolution happening globally not only in the field of electronics but in e-commerce with business leaders like Steve Jobs of Apple Technology who compacted technology while bringing new kinds of services through innovative business technology like iTunes, the iPhone, the Mac Book-Air and the I-pad. The world is really shrinking; distances and products becoming sleek, technologically superior and available globally at the click of a button in a capsule format. Even a non-economist in the modern day understands that macro fundamentals alone cannot reflect true picture of an economy whether it is in India or elsewhere in the West. Fundamentally, one has to charter areas of the enterprise eco-system of a country to judge the overall development taking place in a country. This will include the political, legal and institutional framework. The authors of this book have methodologically covered these areas and synchronized with implying new challenges faced by MSMEs in India.
Banks in India have to play an important role in nurturing the micro, small and medium enterprise sector. There has to be a major gear shift towards the sector by running an extra mile beyond just financing. Towards this end in India there has to be an ongoing improvement between chambers of commerce across regions and covering India as a whole. It is also interesting to note when the country talks about inclusive growth, which will lead to sustainable development. Therefore, it is obvious that all constituencies including the Reserve Bank of India (RBI), academia, banks and entrepreneurs must come to a common platform as partners to achieve this goal. There are significant opportunities for MSME units primarily in the manufacturing sector in the next few years. The authors have touched upon the topic of the Global Economic Crisis and Transition explaining Drivers for Global value chains which include changes in climate, changes in standards regimes, exchange rate, investment flow, etc. Concept of ‘Fordism’, the model of development age in the West and then to a flexible neo taylorist models are good models to understand high wages, mass production (Fordism) and breaking each job down into motions and production management for increased efficiency (Fred. W. Taylor, time, motion study and production management). The concept of ‘Americanism and Fordism’ was first introduced by Antonio Gramsci in his essay. It is more focused on the West. However, it is to be noted that this concept is used more for restructuring work in the South, and the author could have given wider perspective to the readers. However, it would have been interesting if the authors had compared the global economic crisis with India, meaning impact study of global meltdown in India vis-à-vis other countries in the world, especially the West. Though the Lehman Brothers crash in the US affected banking and financial sectors of the globe, the impact on India was milder due to strong fundamentals and regulations of Indian banking system. The authors have covered the spectacular V-shaped recovery for Asia as a whole, giving more details about China’s recovery. As the book is focused on India, I as reader was curious to look at more of Indian examples, which would have given delight and insight about Indian industry and economic fundamentals. It was very useful to refer to the list of illustrative service sectors covered under MEs—BPO, call centres, cybercafés, DTP centres, cable TV operators and a couple of services normally many of us are not aware of. A critical factor in MSME is timely availability of credit, which continues to affect the growth in this sector. There has to be a paradigm shift from lending based on the balance-sheet to tempered, flexible and supportive lending with a monitoring mechanism in the field, which will go a long way in helping this sector in India, as we see huge credit requirements and opportunities.
Information on contagious crisis indications, not only in Europe; a strong counter-cyclical stimulus and rapid recovery in Latin America; and the point of attraction for investors in sub-Saharan African countries are interesting to read. However major challenges in African countries continue to be poverty and unemployment reduction and overall improvement in governance for perpetual investment destinations. Topics of Green and Clean innovations and dimensions of green business are pretty interesting and authors have covered the same in simple language without jargons. The pollution due to industrialization to be minimized by taking necessary steps like introducing newer products and processes is well explained by them clearly. Opportunities for SMEs in the green energy business especially in the organic product sector are quite useful. The authors have clearly indicated that going green can be affordable if small steps are taken, like wind turbines, solar panels, and bio-diesel and bio-mass power. Every organization can do a little bit towards going green. I have no doubt even in India legislations will be strengthened towards giving more benefit apart from carbon credit in the days to come. The Enterprise Pyramid model on enterprise eco-systems is highly informative. The regional balance and details of the rural area share in non-agricultural activities (over 77 per cent) is a clear indicator of storage, retail and logistics moving towards rural areas to augment cost is really interesting. The authors could have highlighted the same, with more growth opportunities for SMEs in rural India in the days to come and most of the distribution companies including MNCs moving, giving outsourcing opportunities to SMEs as well, which may not be in the manufacturing sector but in inter-linked services.
While it is an accepted fact that SME’s in the US are under severe pressure to increase profitability and business margins, which will lead to M&A. But, in my view this will result in more outsourcing though the Federal government is not in favour of the same. It is also to be noted that SMEs in the IT field can never maintain margins during the downturn trend as the drop in volumes during the downturn severely affect the bottom-lines. The authors have clearly supported their findings with the TCS, Wipro and Infosys growth pattern in 2009–10 during such occurrences. The chapters on Communication, Youth enterprise, Women-Entrepreneurship are very well covered by the authors. They could have given more inputs to improve women participation in MSMEs.
MSMER 2011 is a very comprehensive, informative, useful reference book for all those who do research apart from being a tool for decision- and policy-makers.