Small industries and businesses are always important for any economy in the world. MSMEs play a major role in most economies, particularly in developing countries. MSMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal MSMEs contribute up to 40% of national income (GDP) in emerging economies.
We should be aware that 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes the development of micro, small, and medium enterprises (MSMEs) a high priority for many governments around the world. In emerging markets, most formal jobs are generated by MSMEs, which create 7 out of 10 jobs. Access to finance is disproportionately difficult for smaller firms in the least developed countries (LDCs), with 41 percent of MSMEs in LDCs reporting access to finance as a major constraint to their growth and development, in comparison to 30 percent in middle-income countries (MICs) and only 15 percent in high-income countries (HICs).
We are aware that multiple simultaneous shocks and crises have disturbed the global working environment for entrepreneurs and MSMEs. In addition, conflicts, commodity dependence, geopolitical tensions, and pandemics drive social and economic instability, making MSMEs extremely vulnerable to rising inflation and supply chain disruptions.
This MSMEs Day, which is observed on June 27, will also focus on supporting resilient supply chains to ensure workers and the environment benefit. The United Nations General Assembly designated June 27 as “Micro-, Small, and Medium-sized Enterprises Day” (A/RES/71/279) to raise awareness of the tremendous contributions of MSMEs to the achievement of the United Nations Sustainable Development Goals (SDGs).
In his message, the Secretary-General of the United Nations said that “micro, small, and medium-sized businesses play a big role in economies, communities, and livelihoods around the world. They reduce unemployment, drive growth and innovation, and foster new markets and industries. Yet they are particularly vulnerable to rising inflation and supply chain disruptions that have plagued the global economy. Enterprises owned by young people and women are some of the most at risk.”
Small and Medium-Sized Enterprise (SME) Trade Academy: From export development to sustainability, e-commerce, and export processes, the International Trade Centre offers a wide range of courses that can help MSMEs in their growth. Take a look at its varied catalogue with training in different languages. The SME Trade Academy is the online learning platform of the International Trade Centre, a joint agency of the United Nations and the World Trade Organisation. The ITC puts trade-led growth at the centre of its work in developing countries.
The MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play a crucial role in providing large employment opportunities at a comparatively lower capital cost than large industries but also help in the industrialization of rural and backward areas, thereby reducing regional imbalances and ensuring a more equitable distribution of national income and wealth.
The Ministry of Micro, Small, and Medium Enterprises (M/o MSME) envisions a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village, and Coir Industries, in cooperation with concerned Ministries and Departments, State Governments, and other Stakeholders, through providing support to existing enterprises and encouraging the creation of new enterprises.
Micro industries mean investments in Plant and Machinery or Equipment not more than Rs. 1 crore and an annual turnover not more than Rs. 5 crore. Similarly, small means investment in plant and machinery or equipment of not more than Rs. 10 crore and an annual turnover of not more than Rs. 50 crore. Similarly, medium industry means investment in plant and machinery or equipment of not more than Rs. 50 crore and an annual turnover of not more than Rs. 250 crore.
MSMEs hold the potential to transform economies, foster job creation, and promote equitable economic growth if given adequate support. The MSME Day event aims to highlight their pivotal role and explore opportunities for their further advancement. Let us animate women’s and youth’s entrepreneurship and promote MSMEs, which can help us achieve the SDGs.
(With direct inputs from UN publications)