MSMEs are responsible for more than two-thirds of all jobs globally and contribute significantly to economic growth and development. The 2030 Agenda for Sustainable Development, together with the Sustainable Development Goals (SDGs) and their targets, was adopted by United Nations in 2015, to free humanity from poverty, secure a healthy and sustainable planet, and build peace and inclusive societies that promote prosperity and dignity for all. The United Nations has recognized the importance of encouraging the formalization and growth of MSMEs in international, regional, and local markets, including thorough access for all to capacity building and financial services. Likewise, the Addis Ababa Action Agenda on Financing for Development duly underscored the important role of MSMEs in job creation and innovation for sustainable development in developing countries. The Addis Ababa Action Agenda also advocates for the concerted support of national governments, financial institutions, and development banks to support MSME growth by providing a conducive regulatory framework, innovative financing solutions, and systematic entrepreneurship training programmes.
The challenges faced by MSMEs are poor infrastructure, inadequate financial instruments, technology knowledge gaps, lack of innovation, lack of proper skill and training, inability to attract a suitable workforce. On the contrary, large enterprises have the financial capability to invest more in technology and training. They pay higher wages and provide better working conditions while leveraging economies of scale to gain cost leadership. Because of the relative disadvantage MSMEs suffer from low-income generation and poor growth performance. MSMEs are caught in a vicious cycle of poor finances and lower productivity. Digitisation of industries has accentuated the intensity of this vicious cycle. There is a need to understand the functioning of various dimensions of problems faced by MSMEs to bridge the gap between productivity and financial capabilities of large corporations and MSMEs.
The problem of MSMEs has been recognised globally and a strong commitment to their growth has been made by the nations. Despite the constant efforts by global bodies such as the United Nations, World Bank, etc., the wave of digitisation has put immense stress on MSMEs. For example, the companies such as Uber and Ola have put many small rental service providers out of their business. Further, the Covid-19 pandemic has shown that the MSMEs are vulnerable to external shocks such as natural disasters. The reverse migration of the labours has led to the shutdown of operations in many MSMEs. There is a growing concern that MSMEs, which are the source of employment and livelihood for a large section of the population have not caught up to the speed of the current economy.
Despite the disadvantages and vulnerability, MSMEs continue to be relevant in the economy because of their connections to the grassroots. MSME entrepreneurs come with in-depth knowledge of the demands of local communities. They possess the ability to take up inside-out innovations that can be transformed into sustainable development solutions. Their connections with the local communities make MSMEs the best option for rapid adoption and adaptation of digital innovations, thus allowing the extension of the principles of frugal innovation further to the current economy.
In view of the constraints that MSMEs face in this era of disruption and their continued relevance to sustainable development, IIM Amritsar announces the 1st International Conference on Management of MSME with a theme of Realigning Business Practices in the Era of Disruptions to be held on 22nd-23rd January 2022 in Amritsar, Punjab. The conference will be a platform that will bring together policymakers, professionals, academicians, and researchers to share and discuss the knowledge and research ideas enabling MSMEs to take advantage of various emerging trends in this era of disruption.