Indian Economy News

Enhance state governments’ participation to foster innovation in MSMEs: National Manufacturing Innovation Survey

According to the National Manufacturing Innovation Survey published by the Department of Science and Technology (DST), it is important to increase state governments' participation in the innovation exercise in order to foster innovation in medium, small, and micro enterprises (MSMEs).

As per the survey, which included 8,074 respondents from various manufacturing and service sectors-including 52.24% micro firms, 29.26% small businesses, 12.63% medium-sized businesses, and only 5.87% large businesses. The survey period was from February, 2021-May, 2022 and covered the observation period from the fiscal years 2017-18 to 2019-2020.

Additionally, the central government may consider fiscal and non-fiscal mechanisms to assist businesses in enhancing their risk appetite in the pursuit of innovation, such as the launch of an innovation-linked incentive programme to as businesses, particularly MSMEs, in addressing the financial risks associated with innovation uncertainty. The study indicated that the government may refocus some of its innovation spending in order to encourage private sector participation and funding.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.