Namrata Kath Hazarika | 25 Jun, 2012
Indian Small and Medium Enterprises (SMEs) lag behind in innovation due to several barriers in terms of finance, value-creation, inadequate tools and techniques and lack of management development, said the Industry experts.
"SMEs want to innovate, but two things stop them. First, they are so busy running and building their companies, that they don't take the time to innovate. Second, they are not trained in managing innovation. So, they lack the tools and techniques to build on their first innovation, the one that launch their business," the Innovation Workgroup, CEO, David Wittenberg said.
He added, "Every SME starts with an innovation. Every entrepreneur grows his or her company on the basis of that first innovation. Only a few entrepreneurs are able to sustain their growth by innovating multiple times. That's often the difference between a company that stays small and one such as Reliance Industries that becomes huge."
Aashish Mehra, Partner & Managing Director, Strategic Decision Group also said that there are best practices for fostering the culture of innovation. "I will just focus on the value creation part especially for SMEs as they will always have resource constraints," he told SME Times.
Mehra added that it is very important for SMEs to focus on getting the money for all their innovation and R&D projects. And the way to that is to institutionalise the right kind of processes and tools as part of their evaluation trend. If they (SMEs) are not able to do that then they are going to burn potential money. Consequently, an SME can easily be wiped out.
"SMEs do struggle with the idea of value creation with innovation. A lot of them is dabbling in various innovative projects. But whether or not that would be directed towards value creation is doubtful,"he added.
Mehra pointed out that the need of the hour is to make sure that limited resources are directed to the highest value opportunities and that can be done by implementing the best practices.
Also, SMEs need management development, standardisation and processing which will make them capable to standardise processes in the organisation, said Naresh N. Shahani, Managing Director, BMGI, a consultancy firm.
Besides these, Mehra also stated that the government should provide venture capital funding dedicated to SMEs. Also, the right kind of associations will foster the culture of innovation.
"Further, it will train a lot of these SMEs on the best practices from which they can derive the maximum benefit of their innovative projects. I think a lot of initiatives go a long way in helping them to improve their chances of success," he added.
