Overcoming the impact of COVID-19 on MSMEs through skill development – Webinar report

Every year June 27^th is celebrated as World Micro, Small, and Medium-sized Enterprises (MSME) Day to raise public awareness of their contribution to sustainable development and the global economy.

On the occasion of World MSME Day 2021, Team NSN organized a webinar on “Overcoming the impact of COVID-19 on MSMEs through skill development”.

The keynote address for the webinar was presented by Dr. Chandan Chowdhury, Senior Associate Dean & Practice Professor, Indian School of Business.

The eminent panelists for the webinar were Mr. Sandeep Bhatnagar, Director (Marketing & Business Development), NIMSME; Mr. B. V. Sudharshan, Dy Managing Director, NTTF; Mr. Vishwanath Kamath, Managing Director, Fronius India Private Limited; Mr. Ameya Vanjari, Head, Technology and Innovation, Tata STRIVE; and Mr. Aneesh Chandran, VP – Corporate Development, SAHI. The session was moderated by Dr. Madhuri Dubey, Founder, National Skills Network.

Speakers in the panel broadly focused on preparing the workforce for digital transformation in MSMEs, the need for policy intervention to cope with disruptions, why skilling is the key to revive women-led enterprises, industry-relevant skilling to cater to MSMEs, among others.

After a brief discussion on the above-mentioned themes, each speaker shared three action points that are extremely crucial to skill development in MSMEs.

You can watch the complete webinar on our YouTube channel, for which the link is given below. Timestamps for each of the speaker is mentioned besides their name for easy navigation.

Keynote address by Dr. Chandan Chowdhury (6:40- 22:30)

Senior Associate Dean and Practice Professor, Indian School of Business

In his keynote address, Dr. Chandan Chowdhury focused on re-imagining skill development for MSMEs to cope with the challenges of COVID-19. He talked about MSME’s contribution to our economy, the impact of COVID-19 on the business, and ways to enhance MSMEs contribution to the nation’s GDP.

“MSME’s contribution to GDP over the last 10 years has remained approximately in the range of 29.34 to 30.4, currently at 30%.  MSMEs should significantly enhance their contribution to make India a USD 5 trillion economy. To make this change in contribution to the nation’s GDP, MSMEs need to address three basic problems: productivity, scaling up, and market access.

COVID-19 harms MSMEs in terms of productivity, new customer orders, and raw material procurement. It has impacted inbound and outbound logistics and also the order fulfillment process.

To overcome the impact of COVID-19 and to enhance their contribution to our economy, MSMEs must enhance their productivity by improving skills and processes. They must adopt the best business practices and leverage digital for business transformation and market access. Here, the government should also help the MSMEs by creating a modern digital infrastructure through PPP to accelerate their growth”

The three important action points: (1:34:59- 1:41:19)

1. Impact assessment in skill development: There are many skill development initiatives that are being carried out. It is crucial to understand their impact on the productivity of MSMEs. And they should also support the MSMEs to scale up. So, an impact assessment should be done to analyze the impact of skill development in the MSME sector.
2. Female labor force participation should improve: Today, female labor force participation in India is limited to 20.23 %. This should improve. to make India a USD 5 trillion economy, female labor participation should improve and their talents should be leveraged.
3. Building digital infrastructure: There is a strong need to build digital infrastructure to help MSMEs do innovation. There should be a trust factor and digital infrastructure should not be build to monitor MSMEs, rather it should help them innovate and grow. This can be achieved by following a PPP model.

Mr. Sandeep Bhatnagar (23.40 – 28.40)

Director (Marketing and Business Development), NIMSME

“We started a programme for women entrepreneurs to build their capacities. Close to 4000 women of Jammu and Kashmir will be trained as part of the Entrepreneurship Development Programmes.

We are focused on building the right skills and best practices through skill development programmes. So far, we have trained 5000 women in various skill programmes like photography, food processing, fashion, beauty and wellness, tailoring, etc. to make them Atmanirbhar. We provide bank linkages, support them through MSME schemes, among others. Underprivileged women are also being trained to help them set up their own venture.”

The two important action points: (1.17.31 – 1.20.56)

1. Leveraging digital tools: MSMEs must leverage IT tools and digital tools to focus on markets. This will help them transform their business. This could be digital marketing, access to e-commerce, Industry 4.0. All these will help them in selling their products in a better way.
2. Focus on MSMEs manufacturing oxygen and other essentials: We at niMSME are focusing on MSMEs manufacturing oxygen, oxygenators, liquid oxygen, and MSMEs that are manufacturing other essential products that help in fighting the pandemic. We are doing this by giving them several financial incentives, waving of the processing fee, credit guarantee option, and more.

Mr. B. V. Sudharshan (29:40- 37:04)

Deputy Managing Director, NTTF

“Today, as we are working more and more with the machines, they are becoming intelligent and skillful day by day. With a rapid technological disruption, many repetitive tasks in the manufacturing industry are now being done by machines. For MSMEs in the manufacturing industry where most of the workforce does repetitive tasks on a day-to-day basis, skill development has become essential.

To sustain and grow, the MSMEs must hone their skills and prepare for the future, and going forward, there should be more skilling and more earnings for them.”

The three important action points: (1:21:08- 1:22:55)

1. Recognition of prior learning: As most of the workers in the MSME sector don’t have any valid certification for the skills that they have learned on the shop floor, the recognition of prior learning has become crucial for their career growth. RPL will set the base for effective skill development and will help the MSMEs to take the skilling forward.
2. Need for a strong digital presence: Going forward, MSMEs must have a strong digital presence through well build websites and social media platforms. As digital skills have become one of the most crucial skills for any industry sector, MSMEs must adapt to them for sustainable growth in the future. A movement needs to be started for the MSMEs to invest in learning digital skills.
3. Industry 4.0 adaption: MSMEs will also have to prepare themselves to adapt to industry 4.0 for which they need the basic infrastructure like a strong data connection. To create an awareness regarding the implementation of industry 4.0 in MSMEs, NTTF, in collaboration with BOSCH has started an initiative to familiarize the students with the new-age technologies and the implementation of industry 4.0.

Mr. Vishwanath Kamath (37.52 – 44.28)

Managing Director, Fronius India Private Limited

“Welders play an extremely crucial role in an organization. They make or break the job. Welding is a highly skilled job and requires hand-skill. Even though digital technologies are changing the way we operate, the physical presence of a skilled welder is essential for MSMEs.

At Fronius, we are also conducting digital internships for students. So far, we have covered 93 colleges and are keeping the students engaged, while they are away from the colleges.”

The three important action points: (1.23.45 – 1.28.04)

1. Importance of safety gear: MSMEs can achieve more skilling and earn more only by using proper safety gear. We can enhance the lives of welders only by providing them with Personal Protection Equipment (PPE kits). Only then a welder will be able to do their job better and be an asset to the organization.
2. Affordable equipment and low-cost automation: We need to educate and train people to use robotic welding equipment. We at Fronius India are providing training for Robotic Welding Operators. Only with proper training, they will be able to give correct inputs and MSMEs can reap its benefits.
3. Data documentation: Data is power. MSMEs should focus on data documentation. This would help analyze the parameters. Data documentation will also be helpful in failure analysis.

Mr. Ameya Vanjari (45.12 – 54.30)

Head, Technology and Innovation, Tata STRIVE

“Nearly 50% of our learners are recruited by MSMEs. Some of the sectors they get recruited are healthcare, hospitality, automotive, and refrigeration. In all these sectors, it is not just the manufacturing side they get into but also the services side.

To inculcate an entrepreneurial mindset among the youth, we have a programme called the Nano Entrepreneurs Programme. It is successfully running in the states of Maharashtra and Odisha. An entrepreneurial mindset is important in addressing the issue of migration and could address the issue of livelihoods in the country. We must democratize the skill development opportunities, create enthusiasm, and bring in dignity and awareness among the youth in the rural areas.”

The three important action points: (1.28.27 – 1.30.53)

1. Increasing participation of local workforce: We must work towards increasing the participation of the local workforce in MSMEs. To achieve this, we need to address the mindset of the rural youth and the MSME owners.
2. Improving the level of digital skills with MSMEs: Digital skills include not just basic digital literacy, but also market linkage, and access to e-commerce. Along with this, entrepreneurs of MSMEs also need digital skills for rethinking operations – on how to make the workforce learn, how to pay taxes, and so on. This needs upskilling of the MSME workforce.
3. Need for the multi-skilled workforce: MSMEs require people with multiple skills and not just the workforce with deep hand-skill. We need to look at clubbing certain courses and training the people in multi-skill training programmes.

Also read: Government schemes and initiatives that support MSME growth in India – https://nationalskillsnetwork.in/government-schemes-and-initiatives-that-support-msme-growth-in-india/

Mr. Aneesh Chandran (55:38- 1:49:00)

VP – Corporate Development, SAHI

“Today, contract staffing, gig model, apprenticeships, and freelancing models are some of the core reasons behind the changing dynamics of the hiring process for most of the organizations. These models are getting formalized and there’s a recognition happening from a gig platform perspective.

As productivity is one of the major issues in the MSMEs, there is a need to increase productivity for India as a whole. For this, a few initiatives and transitions are happening. Four pertinent labor market transitions are expected to yield results- the school-to-work transition, Unemployment to employment, Underemployment to better employment, Monthly, daily wage to outcome-based wage. “

The three important action points: (1:31:09- 1:34:23)

1. The need for informal to formal transition- Most of the MSMEs are informal. So, there is a need for the informal to formal transition. For this, fundamentals like adherence to labor laws, social security benefits, minimum wage compliances, health, and safety aspects should be put in place.
2. MSMEs should work together: As 97% of MSMEs are micro-enterprises, they can’t adapt to the models that we are talking about as these models will not be scalable to them. There should be a way for the MSMEs to come together, form a collective, and work.
3. Adaption of emerging models– To enhance productivity at the workplace, MSMEs should adopt restructure their activities by dividing them into smaller tasks that can be delivered on an outcome basis. To achieve this, MSMEs should adapt to newer models such as contract staffing, gig model, apprenticeships, and freelancing models.