Innovation involves new ways of doing different things. It is sometimes associated with failure, risks and new methods of managerial operations for getting rid of old ideas. It is important to note that innovation requires action rather than just conceived ideas. Innovation is also a process where an entrepreneur uses new or existing resources and creatively equips it with the ability to create wealth.
Most organizations are knowledge-oriented, with their success and survival depending on increased creativity, innovative ideas, inventiveness, and discoveries. The rate of changes in SMEs in India is facilitated by the process of innovation and daily activities in order to remain competitive. Instead of seeking the assistance of other agencies, they take it upon themselves to find their own innovative ways of overcoming all barriers.
Barriers and how to overcome it
Technology is the key needed to boost a company’s performance in today’s competitive informational age. Adopting modern technology has also become a major barrier. Hence, SMEs must create and implement a technological strategy which must be effective. They must also implement financial, operational and marketing strategies, and adopt the one that effectively integrates their operations in their environment with customers and suppliers.
Innovation in developing countries is promoted by venture capital in order to help in local technological developments. In India, some financial institutions and banks have recently started supporting financially for the commercialization of locally developed technologies and the use of imported technologies for broader domestic applications via venture-capital.
This brings us to financial barrier which is actually another major problem. The availability of institutional finance for affordable and simple terms is a barrier in accessing new technologies. In India, the situation is more complicated due to the fact that the chosen mode of finance is either acquired personally or from other sources.
The managerial barrier is a result of inept management skills, which usually result in no competition among small enterprises. However, some mentoring services tend to effectively address the barrier for a proper growth. They also offer mentorship and relationship services to SMEs. Here, a mentor offers his /her services and provides the professional as well as moral support needed for an enterprise to grow and exist during difficult times.
In addition to the recent news of the government of India taking a number of initiatives to assist SMEs and set up state-level and national institutes, they are regularly conducting a whole lot of workshops, programs, and initiatives to provide a well-rounded help to SMEs in India. Despite all the barriers and shortcomings that have already been stated earlier, the local SMEs have maintained their path of continuous progress. Moreover, their level of growth is higher than that of the entire industrial sector. The SMEs contribution to India’s GDP is about 7 percent. Although they displayed impressive strength, resilience and vigor couple of years ago, they are now in a situation where they can not only survive but also ensure success and win in the competitive environment.