By M H Bala Subrahmanya

Skill, labour, talent for MSMEs: Despite the numerically strong presence of Micro, Small and Medium Enterprises (MSMEs) in India, in terms of macroeconomic variables such as the number of enterprises, employment, production, GDP contribution and exports, we do not have an exclusive post-graduate management program to suit the management needs of MSMEs. In general, management programmes in varying forms in exclusive management institutions, and in departments of management in universities across India, cater to the needs of industry and services sectors that are organized and large. At the most, some of these management programs offer an elective on entrepreneurship and/or small business management, and not beyond.

In fact, students in India, in general, join post-graduate management programmes with the intention of joining organized large industrial enterprises (including multinational corporations). Therefore, internships, projects, and placements are always directed towards organized large industrial enterprises. As a result, there is hardly any who will be left to join the vast and growing MSME sector. This represents the supply-side problem.

The challenges and requirements of the MSME sector are unique and therefore, distinctly different from that of the organized large industrial enterprises. Uneconomic firm size, limited market size and focus, inadequate access to institutional finance, lack of sophistication in technology and production operations, inadequate quality of human resources that they obtain and retain – all together describe different dimensions of distinct challenges of MSMEs. Therefore, management institution trained post-graduates in India currently are hardly appropriate to tackle the challenges of MSMEs. More importantly, there will be hardly any MSME that will and can participate in the placement sessions of management institutions, technology startups apart. This represents the demand-side problem.

Therefore, both supply-side and demand-side problems call for an exclusive MSME focused (post-graduate) management programme to generate trained, MSME appropriate management personnel. The exclusive Small Business Management (SBM) programme, at the outset, will make it clear that it is exclusively MSME focused. Another approach to generate trained, MSME appropriate management personnel is to initiate an integrated (five-year) master’s SBM programme that can be supplemented to the PG programme. The integrated master’s programme can be exclusively thrown open to ITI diploma holders. In the fourth year, these integrated programme students will join the first-year master’s SBM programme.

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The curricula must be MSME problem-specific, particularly in the functional areas of management such as finance, human resources, marketing, and production & operations. The course structure must include periodic field visits, to enable the students to understand MSME specific issues. In addition, there must be exclusive courses on networks and ties, innovation management and international business. An SBM programme emerged graduate must know: (i) how to formulate and nurture networks, (ii) how to carry out innovations, and (iii) how to enter and operate in the international market.

There must be compulsory internships in MSMEs (in between the fourth and the fifth year), and in the fourth and the final semester, each student must do a project work based on an identified live MSME problem. To ensure that students do get adequate options to do internships and carry out projects, the SBM programme offering institution must have prior tie-ups with MSMEs, MSME associations as well as MSME promotion agencies in and around the region of the institution.

Given this, to make the programme viable by attracting an adequate number of graduates to the program, (i) the fee must be reasonable, (ii) scholarships must be available, and (iii) placement must be guaranteed. To ensure an adequate number of scholarships available, institutions (including MSME specific institutions) such as ECGCI, EXIM Bank, NABARD, NIMSME, NSIC, SFCs, SIDBI, SSIDCs, and MSME associations, among others, must be impressed upon to institute scholarships. Even some of the medium-sized (financially strong) enterprises may be encouraged to institute scholarships. Expenditure incurred on such scholarships by MSMEs may be treated under CSR.

The above steps will address supply-side concerns as much as demand-side challenges confronted by MSMEs today. A steady generation of trained, MSME appropriate management graduates will go a long way in enabling the gradual growth and transformation of MSMEs and thereby bridge the “much-needed” middle, in the industrial sector of India.

M H Bala Subrahmanya is Professor – Department of Management Studies at Indian Institute of Science – Bangalore. Views expressed are the author’s own.