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Focus on SMEs can help India rise – An interview with Mr. Samir Sathe

Samir Sathe, is the EVP of Wadhwani Advantage at Wadhwani Foundation. The Wadhwani Advantage Program focuses on accelerating revenue and job growth for small businesses.

  1. How can SMEs reach enough financial stability to attract appropriate talent for production, technology, and marketing? 

SMEs need to be leaner, fitter to have stability. They should adopt digital transformations quickly to change the nature and economics of interactions with customers, vendors and partners. That is the single most important step to cut costs, improve revenues, and financial stability. There are several others, but if there is one thing to be done, it is this one. This will free up capital and cash flows to hire better talent, making the organisation competitive.

  1. How can we alter the societal attitude towards SMEs to help them rise?

The movement to uplift the disadvantaged sections of society has accelerated, with billions of dollars being put in impact capital. The first thing is to recognise that an SME entrepreneur is an actually disadvantaged community and not a privileged one. It lacks adequate knowledge, expertise, money and scalable business models. The second thing is to encourage gender equity among entrepreneurs. That alone can result in better leadership decisions at the top. We need to take women ownership to 25% from the current level of sub 5%, especially the enterprises > Rs 5 Cr Revenue. Thirdly, society needs to recognise that the health of entrepreneurs has a straight impact on the health of the employees. Helping them is helping the employed.

  1. SMEs have helped create 11.10 crore jobs so far in India. Do you see stability and security in these jobs?

No. 1/4th of the workforce will be rendered useless if not upskilled and reskilled. The skilling of the workforce to train them on the skills of the future is paramount. That needs to be addressed with a war-like situation. Unfortunately, skilling is only understood in the context of youth and entry-level job seekers. Much more needs to be done to reskill and upskill the workforce who have been employed for > 10 years. That is still a white space.

  1. Problems of lack of capital and infrastructure can be solved by taking help from financial institutions. However, we have seen a trend in increasing debt for SMEs and MSMEs due to this. Please comment on how these businesses can prevent this from happening.

Unlocking capital is more important than increasing the capital base. That needs management skills and cross-functional superlative performance. Take an example of project management, a necessary basic skill in planning your time, work and people’s jobs. Go around, and you will discover that this basic skill is simply not there. White-collar people cannot plan a task, decide the timeline, plan resources, manage dependencies. So we are dealing with basic skills here! The efficiently run organisations would need less cash than today for any given scale of operations, and therefore, let us focus on unlocking cash rather than asking for it.

  1. SMEs have a huge hand in helping large MNCs and e-commerce giants grow in India. Please comment on the competitive efficiency and open market economy in this scenario.

SMEs help create value in GDP and employment. The issue is that we treat MNC and Indian quality differently even today in our mindsets, quality standards, service levels etc. The day this distinction dies in the factories, we will truly have an open market and a level playing field in the way enterprises compete. Unfortunately, innovation capital and productive capital find different sponsors. That needs to stop. Imagine that the country encourages productivity, innovation in a micro-enterprise as much as it does in a large enterprise, whether Indian owned or otherwise. Then watch the fun. We will see vastly elevated levels of competitiveness.

  1. The SMEs in India are largely owned by technology illiterate entrepreneurs. How does the Wadhwani Advantage program nurture these entrepreneurs into understanding the importance of AI and new-age business methods?

We train and upskill SME entrepreneurs in building management capabilities in all areas, including technology. Our mission is to empower SMEs with capabilities to accelerate their growth. Therefore, we are making sure that they learn to use data to make decisions and use technology as a friend and not as a master. This needs a mindset change, and that is what we do through our empowerment programs.

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