Indian MSMEs to embrace sustainability & inclusive development

By OEM Update Editorial July 8, 2019 3:41 pm IST

Indian MSMEs can play a significant role in establishment of an inclusive and sustainable industrial development (ISID) as propagated by the UN.

Focusing on “With a focus on augmented manufacturing in future, UNIDO stands for strengthening the workforce and plants, producing quality products are addressing the challenges faced by the people. The idea of sustainability has economic, social and environmental considerations and in UN’s bid towards meeting various sustainable development goals (SDGs).

There exists an inconsistency in adopting the technology advancements, awareness and acceptance for the same, as a part of inclusive development across the MSMEspectrum, some Indian MSMEs profess a negative perception that the whole idea of sustainability may hamper their business interest, wherein it will not. Though there are a couple of challenges in reaching out to MSMEs that are unwilling to try out new production models and methods. However, a majority of businesses are at the initial stage of adopting environmental responsibility.

The UN, which calls micro small and medium enterprises, the “first responders to societal needs”, will celebrate MSME Day on 27th June. Its specialised agency UNIDO, mandated to promote industrial development, inclusive globalisation and environmental sustainability, believes that Indian MSME landscape, characterised by a large informal base, poses many unique challenges.

For long, Indian MSMEs preferred jugaad economics (low-cost indigenous solutions) in many of their processes, but certainly, going for a cheaper option is not always in their self-interest, besides advocating for capacity building programmes for MSME entrepreneurs to bring them in sync with a holistic idea of efficiency, sustainability and inclusiveness.
According to the International Finance Corporation (IFC), informal firms are estimated to account for around 74 per cent of all MSMEs in the world, and about 77 per cent of all MSMEs are based in developing countries.

Although MSMEs generate new jobs, they face many challenges in day-to-day operations. Financing constraints are also magnified for informal firms, which tend to be small in size, and although often less productive than formal enterprises, contribute significantly to economic activity and employment.