Role of Smes in National Development (Case Study of India)

Small and Medium Enterprises (SMEs) as defined by the US business Act of 1953 refer to business enterprises that is independently owned and operated and that isn’t dominant in its operation. One with fewer than five hundred employees. According to Bank of Ghana (2006) under the Funds for Small and Medium Enterprises Development defined small and micro enterprises as firms with assets (excluding land) of between 25million Ghana cedis and 5million Ghana cedis. A lot has been said and written about SMEs the world over. It has also formed the subject of discussions in so many seminars and workshops both locally and internationally. In the same vain, governments at various levels (local, state

(Business Management: a contemporary compilation). The Growing interest in the area of Entrepreneurship has developed in changing roles of small businesses. Small Entrepreneurship has great potential in developing countries. Due to Statistics and analysis of several countries, it is shown that Small Industries have grown faster than large industries. Large Industries lost jobs as Small Industries created workplaces. The Focus is on Small Industries which led to the main source of employment in the country.

SMEs are a very heterogeneous group. They were in a wide range of business activities ranging from the artisanal production of agricultural products for the rural market, a coffee shop in the corner, an internet café in a small town for a small, complex engineering or software firm sales in foreign markets and medium-sized enterprises sold to multinational manufacturers in domestic and foreign markets. Owners may or may not be poor; Firms operate in a wide variety of markets (urban, rural, local, national, regional and international); the embodiment of different levels of skills, capital, sophistication and growth orientation, and may be in the formal or informal economy. The acronym "SMEs" is used by international organizations like World Bank, WTO and the United Nations. Small enterprises are largely dominated by large companies, as well as many more people. In addition, SMEs are motivated for managing innovation and competition in different sectors of the economy

First of all, small businesses are classified by two important definitions the size of the value of the business and the quantity of employees that this business has. The U.S. Business Administration say that the most effectives way to classification a business as small is not just by a general size because each sector of production and each commerce sector. One example of it is that in the sector of agriculture, Forestry, Fishing and Hunting, the Subsector 113 – Forestry and Logging a business with 400 employees still in the classification for small business because for this specific subsector the quantity of employees to be consider a medium or big company is more than 500 (SBA, 2016). To classify a business as a small one people might need to consider what sector of the economy this business is part of. After identifying the sector of the economy people should consider the

(Michael E Porter, 1998) proposed that there is some analysis on why this industry become down due to lack resources or skills of existing firms, existence firms are prejudiced or careless and lack of attention by outside firm. According to (Kevin Johnston, 2012), the advantage of fragmented industry to the small business are no big players, low entry barriers, smaller is preferred and differentiation

According to the data of the Department for Business Innovation and Skills of UK government, there are 5.4 million small and medium enterprises (SMEs) in 2015. Based on the official EU definition, if the staff headcount of the enterprise is less than 250 and the turnover is less than or equal to 50 million euro, which will be classified as medium sized enterprise. And for small and micro enterprises, their headcount should not be more than 50 and 10, the turnover has to be under 10 million euro and 2 million euro. Most of the SMEs contribute in the Construction section and there is a number of 956,000 SMEs estimated by the government. Furthermore, the industry of Professional, Scientific and Technical Activities (792,000), Wholesale and

2004) the innovation is not just about new ideas, but also it’s about the actions to make new product or improving producing process. There for, the procedure and results are not only concerned with the firm but also contains market and other external factors. The differences between innovation in SMEs and large firms, that the SMEs have more limited resources and limited innovative capability (Kanamori et al., 2006, Zhu et al., 2012). As the process of innovation is defined as the formation of new knowledge, innovation in SMEs is considered to be disadvantage compared to their large rivals who have greatly bigger knowledge base and human capability. Moreover innovation in its nature is risky and uncertain (Fagerberg, 2004), the barriers facing innovation in SMEs, the SMEs disadvantages are limitation in resources, informal structures, managerial capability and financial capacity, However SMEs have flexible and reactive in structure change and market dynamics. The main advantages of SMEs are flexibility and adaptability than large organization than larger organization. The flexibility and spongy capacity is conclusive for firm development (ERIKSSON, 2014). Small firms sometimes relay on innovating throw flexibility and time recognition to market dynamics in order to create and aid profitable market niche (CALOGHIROU, 2004). An analyzing of in manufacturing sector in china found that

In Kenya, SME’s are vital as they employ more than 87% of the labor force that contribute 18.4% of the National Gross Domestic product (GDP). (GOK, 2009).However, their existence in the Kenyan economy has not been without fair challenges that inhibit their growth, potential and offer them an average lifespan of five or less years in existence.

Small and medium enterprises play an important role in providing employment, improving people’s livelihood and in the overall economy. It is therefore imperative that the MSMEs explore other cheaper means of finance e.g. equity,

A business will be deemed as an SME if it meets either one of the two specified criteria, namely sales turnover or full-time employees whichever is lower. SME Corporation Malaysia was established under the Small and Medium Enterprises Corporation Malaysia Act 1995 [ACT 539] on the 2nd October 2009. It was formerly known as the Small and Medium Industries Development

SMEs (Small and Medium enterprises) are one of the key drivers of India’s economic growth. Over the years a large number of small and medium size companies have grown in the market. Small and Medium Enterprises (SMEs) have been contributing so much towards the GDP of India. With their emergence and huge potential, the government of India launched regulated trading platforms for the SMEs, which allows them to get listed without bringing an IPO. The stock exchanges for these enterprises were introduced so that these firms can do better in financing activities for themselves. Of course, there is an option of adding debt, which also helps improve the overall return on equity, but the cost of raising debt for SMEs is relatively higher. High interest expense does not look very good on the profit and loss statement of a growing company. Thus, in order to fund the next stage of growth without excessive interest cost burden, companies look to access equity funds via capital markets. This is where listing on an exchange comes into the picture. The research would include the implications of the introduction of the BSE and NSE SME stock exchanges how well they are performing. Also, what is the response from the SME sector.

The Ministry of Micro, Small and Medium Enterprises (MSME), is launched by Government of India, which has adopted the cluster development approach as a key strategy for enhancing the productivity and competitiveness. It helps capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country.

In his book (Prasad C. S., 2004) has predicted the vision of SMEs up to 2012, regarding the employment generation and open economic development of trade from India. The author explained that due to Liberalization, Globalization and WTO a rethinking is being made to analyse the targets before the SMEs sector. The author suggested that with the inherent advantage of flexibility and innovativeness of the sector, the major constraints of economies of scale could be met by adopting the cluster development and formulation of appropriate policies. The book is based on the compilation of the various articles of the author published in different journals on the theme of WTO and SMEs, SMEs financing, SMEs policy, Employment Generation in SMEs and Export potential and cluster development among SMEs etc.

Abstract: The growth and development of Small Scale Industries now known as Micro Small and Medium Enterprises (MSMEs) was at priority for the Government of India since independence. The Government have an expanded organisational structure to monitor and guide the growth of MSMEs. There are various policies, programmes and schemes provided by the Government to support and expand MSMEs growth. Statutory organisations like KVIC, Coir Industries, NSIC, SIDBI etc, are there for assistance, policy formulation and implementation. The growth pattern in MSMEs in India has a positive point, which indicates as the industries grew it lead to the growth and

If efforts are put towards promoting SMEs, particularly, the likes that are concerned with the informal sector, achievement of development that is sustainable is inevitable. Most developing as well as developed countries depend on the small and micro enterprises in the provision of employment. Even though a number of small and medium-sized enterprises are not part of the formal sector that is