• June 19, 2024

State Government Is Working Towards Fostering Innovation In The MSMEs

The central government is considering fiscal and non-fiscal mechanisms to help the firms improve their risk appetite. And this will also help in their pursuit of innovation, such as innovative linked schemes, according to the National Manufacturing Innovation Survey.

The survey also states that as the government is showing its support towards the private sector, the government is also working towards redirecting a part of its innovation expenditure towards the purpose of participation in the innovation in the private sector and crowding in private sector funding.

When it comes to ease of doing business with the MSMEs, it is important to boost the innovation at the MSMEs, and it is also important that the participation of the state government is enhanced in the innovation exercise stated by the Department of Science and Technology (DST) in their released National Manufacturing Innovation Survey.

They have stated in their survey that when it comes to having a better connection with the MSMEs, the state government has the upper hand in this. They can also become vital when delivering MSME-oriented policy and incentive schemes. This is true for all of the innovations and the survey reported.

The survey, which was comprised of 8074 respondents, included 52.24 percent micro firms, 29.26 percent small, and 12.63 percent medium across a wide range of service and manufacturing sectors, and only 5.87 percent of them will be counted as the large firms, also states that 73.76 percent of the respondents among them were non-innovative as they were not introducing any business process and product innovations in the survey period.

The survey lasted from February 2021-May 2022 and covered a major observation period of the financial years of 2017-18 to 2019-20. The survey also made some comments which suggested the participation of the state government in innovation among the MSMEs.

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The comments stated that many overarching barriers to innovation could be observed in the innovation system. This offers a strong baseline for orienting and updating a wide range of MSMEs schemes. The future initiatives are designed to amplify competitiveness and manufacturing productivity, which may examine the existing policies’ success with the use of SSI lenses and manufacturing innovation.

Respondents need more funds within the group and firm for over 45 percent of respondents, followed by 40.30 percent of the firms claiming high innovation costs as a challenge to the innovation part. There also needs to be more external sources, which act as another barrier for 39.52 percent of the firms.

Also, there needs to be more demand in the market for innovation. According to the survey, 71.23 percent of the respondents were among the ones in the most critical barriers to being innovative in the market, which was followed by the organization rigidities within the groups as per the 69.28 percent of the respondent lack the funds within the group of the firm for 68.57 percent of the respondents. Then there is the need for more finance from external sources, according to 68.38 percent of the respondents.