The remaining MSMEs are un-registered. For various structural and non-structural factors, the legacy of “scarce investment – stagnant turnover” trap in the MSME sector is shackling growth in the sector, perpetuate the situation of “the missing middle” of mid-size firms, inhibiting India’s high growth ambition.
Also against the backdrop of COVID-19 induced business disruptions, while private corporate sector has shown robust resilience as firms adopt new modes of operations and align their business strategies to the new environment for doing business, a disaggregated firm level analysis reveals uneven recovery across the weak and strong firms. While steady improvement is observed for the strong firms, weak firms (predominantly MSMEs) remain vulnerable with negative profitability.
To overcome this legacy impediment and to capture frontier opportunities of manufacturing, India needs to multiply its number of mid-size firms by supporting scaling up of small firms. Improving access to capital and technology and easing other barriers for business expansion would help the best-performing small firms to climb the ladder of scale and global competitiveness.
GFST’s MSME vertical, in pursue of this, has set its goal as facilitating emergence of a sub-set of the micro and small firms out of the “scarce investment – stagnant turnover” trap into “the missing middle” of mid-size firms through envisioning entrepreneurship and innovations in them.
The vertical desires to become a lead forum researching and advocating firm level entrepreneurial and innovation strategies for start-ups and SMEs based on activities such as – Holding Innovation Labs/ Forums to bring together experts from around the world to formulate and promote firm level entrepreneurial and innovation strategies around specific commodities/ services, Conducting Awareness/ Communication Campaigns by producing and disseminating lab/ forum reports, other print/ virtual media products and webinars, etc. on entrepreneurial and innovation strategies around specific commodities/ services for knowledge sharing and awareness generation, Championing/ Advocating reforms by networking with commodities/ services clusters, industry chambers, associations of professionals, business schools, financial media, etc. to build coalitions on entrepreneurial and innovation strategies around specific commodities/ services and promote uptake, and developing and managing Aggregator Platform by establishing a digital marketplace extending aggregator services to facilitate knowledge sharing and partnership building on entrepreneurial and innovation strategies around specific commodities/ services.
India has a rich scatter of traditional handicraft and local art forms unique to the different states. These traditional handicraft and local art forms are mostly found clustered in pockets of villages and towns, nurtured by generationally handed down craftmanship. These traditional handicraft and local art forms have huge potential in the global markets as discerning customers are becoming increasingly conscious of ethnic products and skills. However, due to lack of innovation and value chain linkages, a range of such traditional handicraft and local art forms are losing their existing markets and even becoming extinct.
To facilitate systematic growth and value addition to the traditional handicraft and local art forms sector and to establish economy of scale and improve quality standards to penetrate national and global markets, GFST’s Manufacturing - ODOP vertical desires to develop and promote a selection of traditional handicraft and local art forms through a One District One Product scheme (ODOP) strategy in partnership with state governments and private investors.
The objectives of the Manufacturing - ODOP vertical is preserving and developing traditional crafts/ skills and promoting local art forms, improving product quality and craftmanship, innovating and transforming the products in an artistic way (through standardization, packaging, branding, labelling), connecting production with tourism (live demo, village haats, sales outlet – gifts and souvenir), and increasing local employment and income opportunities.
The focal activities of the Manufacturing - ODOP vertical may range from skill development and innovation, financial support for value chain creation and expansion, promoting common facility centres for quality control, standardization, packaging, branding, labelling, etc., and marketing intelligence and facilitation.