The UN General Assembly in its 74th Plenary held on the 6th April, 2017 declared 27th June as Micro, Small and Medium-sized Enterprises Day, recognizing the importance of Micro, Small and Medium-sized Enterprises in achieving sustainable development goals and in promoting innovation, creativity and sustainable work for all.
What is a micro-, small, or medium-sized enterprise?
The criteria for defining the size of a business differ from country to country. As a reference, the European Commission’s definition of micro-, small and medium-sized enterprises is established according to the number of employees and the annual turnover or balance sheet:
The choice of MSME definition could depend on many factors, such as business culture, the size of the country’s population, industry and the level of international economic integration.
According to the data provided by the International Council for Small Business (ICSB), formal and informal Micro-, Small and Medium-sized Enterprises (MSMEs) make up over 90% of all firms and account on average for 70% of total employment and 50% of GDP.
These enterprises, which generally employ fewer than 250 persons, are the backbone of most economies worldwide and play a key role in developing countries. These types of enterprises are responsible for significant employment and income generation opportunities across the world and have been identified as a major driver of poverty alleviation and development.
MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households. MSMEs can even sometimes be the only source of employment in rural areas. As such, MSMEs as a group are the main income provider for the income distribution at the "base of the pyramid".
Micro, small and medium sized enterprises are vital in achieving the Sustainable Development Goals, in particular in promoting innovation, creativity and decent work for all.
Efforts to enhance access to finance for SMEs across key sectors of national economies are an important element of implementation of the Sustainable Development Goals (SDGs). SDG targets 8.3 and 9.3 call for enhancing the access of SMEs to financial services. In addition, SMEs are an important element in the implementation of SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation and infrastructure.
The COVID-19 crisis has taught us that the pandemic and containment measures do not impact everyone in the same way. Among the private sector, Micro-, Small and Medium-sized Enterprises (MSMEs), especially those led by women, youth, ethnic minorities and migrants, suffered the most. An International Trade Centre survey on COVID-19 impact among businesses in 136 countries has shown that nearly 62% of women-led small businesses have been strongly affected by the crisis, compared to just over half of firms led by men, and women-owned are 27% more likely not to survive the pandemic.
As governments vaccinate their populations, the world continues to deal with several other challenges that include the ongoing effects of climate change, biodiversity lost, and pollution. If unabated, these three crises are expected to have severe negative implications for economic growth, human health and ecosystems, employment and livelihoods. What lessons can we capture from COVID-19 response to ensure that MSMEs are resilient to the looming climate crisis, and are drivers of an inclusive transition towards more sustainable economies?
Formal and informal MSMEs make up over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP. As such, they are key actors in achieving a green recovery.
With the goal of overcoming these challenges, the International Trade Center, United Nations’ entity, works in the internationalization of micro and SMEs. The center has launched its flagship report: "The SME Competitiveness Outlook 2021: Empowering the Green Recovery. To access the report, click here.
10 steps for a safe and healthy return to work in times of COVID-19
Source : UN
As per Central Statistics Office (CSO), share of MSMEs in the Gross Value Added (GVA) in All India Gross Domestic Product (GDP) for the year 2020-21 is 30%. Further, as per 73rd Round of National Sample Survey (NSS) Report on Unincorporated Non-Agricultural Enterprises’ (July 2015-June 2016), 11.10 crore workers are estimated to be in the MSME sector.
The growth of Micro, Small and Medium Enterprises depends on various factors such as access to market, quality of products, availability of timely credit, upgradation of technology etc. For capacity building of Indian MSME sector, Ministry of MSME is implementing various schemes for skill development, technology upgradation, marketing support and access to credit to MSMEs. Besides, a provision has been made in Public Procurement Policy which mandates 25 % of annual procurement from Micro and Small Enterprises (MSEs) by Central Ministries/Departments and CPSEs, thus providing marketing opportunities to MSEs for their growth and development.
To counter the impact of Covid 19, Government has taken a number of initiatives under the Atmanirbhar Bharat Abhiyaan to support the MSME sector. Some of them are:
An Online Portal “Champions” has been launched on 01.06.2020, which covers many aspects of e-governance including redressal of grievances and handholding of MSMEs. Further, RBI has also announced several measures to Reduce Financial Stress of MSMEs.