What is Udyam?
Christening the Indian MSME, the Government of India recently launched “Udyam”. Udyam literally means “The Enterprise” in Hindi and “Hard Work” in Sanskrit. I look at this as a first step to give the MSMEs in India an opportunity to stand apart in the global economy. I hope for the MSMEs to rise to a level where they can be compared with the Mittelstand in Germany and other parts of Europe.
What is a Mittlestand?
For those who are not aware, Mittlestand commonly refers to small and medium-sized enterprises in German-speaking countries, especially in Germany, Austria and Switzerland. It plays an important role in Germany’s economy.
More than 99% of the enterprises in Germany are Mittelstand. They account for about 68% of Germany’s exports. Mittelstands are considered to be very well managed enterprises, despite their small size.
Although managed by the owners, they are run very efficiently with robust systems and processes, producing highest quality output that can compete well in the global economy.
As one HBR article quotes – Mittelstand companies are “highly focused, achieving unprecedented efficiencies by designing a business model with a razor-thin focus and learning to do the one thing really well; then to compensate for their razor-thin focus, they diversify internationally and enjoy great economies of scale”.
Initiatives needed for MSMEs (Udyam)
The above vision can be achieved for Udyam by implementing an ecosystem to nurture the MSMEs to help them compete globally. I look forward to the following initiatives from the Government of India:
- Ease of Incorporation and various registrations.
- Technological support on development of niche areas of expertise.
- Ease of raising capital in the form of debt and equity.
- Marketing support for reaching global markets.
- Skill development through apprenticeship and making the skilled manpower available to the industry.
- Making available expert professionals for implementing lean processes and robust systems.
What other initiatives according to you are needed to reform the MSMEs?