Germany's SME Story - Lessons for India: Report
Updated: Nov 26, 2015 02:09:01pm
New Delhi, Nov 26 (KNN) The SME-led development of Germany is a unique and highly successful economic phenomenon that could serve as a model to promote trade and industry for emerging India, said a report by Institute for Small Enterprises and Development (ISED).
A recent study by the International Monetary Fund (IMF,2015) has summarised India's challenges on the export front, in relation to some critical areas. Structural transformation depends not only on how much countries export, but also on what they export and with whom they trade. But, what do the SMEs, who contribute the bulk of India's exports, perceive? This is a critical issue for which a satisfactory answer is still begging.
Some of the recent studies on the German SMEs are illuminating. Latest research at the ISED brings out some striking points that deserve consideration by policy makers in India. The SME-led development of Germany is a unique and highly successful economic phenomenon that could serve as a model to promote trade and industry for emerging India.
SMEs companies are the backbone of the German economy. Some 3.7 million GM Companies account for 99% of all German firms, and in 2011, employed 15.5 million people. In 2014 alone SMEs created almost one million new jobs, whereas the big companies cut more than half a million jobs, ISED report which was released recently pointed .
The dynamic innovation of SMEs makes this possible: 54% of SMEs created a product or process innovation between 2008 and 2010; the EU average was only 34%. Every year about 90% of patent applications in Germany come from the SMEs.
“The impressive GM performance enables Germany to maintain its high position in the head-to-head race for global export champ with much bigger countries like the China and the US,” highlighted the report.
Emerging India lacks institutional frameworks that support SME trade and investment—in contrast to Germany’s comprehensive system of chambers of trade and industry, as well as chambers of crafts that promote SME trade and investment activities at home and abroad. These chambers greatly contribute to the essential role of the SMEs in Germany’s economic policies, the report said. (KNN Bureau)
A recent study by the International Monetary Fund (IMF,2015) has summarised India's challenges on the export front, in relation to some critical areas. Structural transformation depends not only on how much countries export, but also on what they export and with whom they trade. But, what do the SMEs, who contribute the bulk of India's exports, perceive? This is a critical issue for which a satisfactory answer is still begging.
Some of the recent studies on the German SMEs are illuminating. Latest research at the ISED brings out some striking points that deserve consideration by policy makers in India. The SME-led development of Germany is a unique and highly successful economic phenomenon that could serve as a model to promote trade and industry for emerging India.
SMEs companies are the backbone of the German economy. Some 3.7 million GM Companies account for 99% of all German firms, and in 2011, employed 15.5 million people. In 2014 alone SMEs created almost one million new jobs, whereas the big companies cut more than half a million jobs, ISED report which was released recently pointed .
The dynamic innovation of SMEs makes this possible: 54% of SMEs created a product or process innovation between 2008 and 2010; the EU average was only 34%. Every year about 90% of patent applications in Germany come from the SMEs.
“The impressive GM performance enables Germany to maintain its high position in the head-to-head race for global export champ with much bigger countries like the China and the US,” highlighted the report.
Emerging India lacks institutional frameworks that support SME trade and investment—in contrast to Germany’s comprehensive system of chambers of trade and industry, as well as chambers of crafts that promote SME trade and investment activities at home and abroad. These chambers greatly contribute to the essential role of the SMEs in Germany’s economic policies, the report said. (KNN Bureau)
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