Technological Upgradation in Smes.: Presented By, Subhash Kumar & Shivam Rai

Technological Upgradation in SMEs.
Presented by, Subhash Kumar & Shivam Rai

21
Learning Objectives
Concept Need
of Technology Upgradation.
and importance of Technology Upgradation in SMEs.

in Technology Upgradation.
Problems
Govt.s
SMEs
role in Technology Upgradation.

for effective Technology Upgradation.
in present scenario.
Guidelines
Conclusion.
22
What Technology is???

Origin: Technikos (Greek) + Ology Meaning: Technikos: Of Art, Skillful, Practical Ology: Knowledge of It is the branch of knowledge that deals with the creation and use of technical means and their interrelation with life & society.
23
Need of Technology Upgradation

Globalization
Change
Change
in Communication Technology
in Techniques of marketing Consumer Preferences need of R&D and Quality Control
Changing Emerging
Standardization Cost Gain
Control Efficiency and Consistency

24
Importance
The Importance of technology in Enterprises development
Increases
Productivity (Increased efficiency and effectiveness) Increases Competitiveness in Market Increases Sustainability Increases Social Status of Entrepreneurs Reduces Drudgery of Entrepreneurs Increases Backwards-Forwards Linkages
25
Technological Backwardness of SMEs
However, the SMEs in India, which constitute more than 90% of the total number of industrial enterprises and form the backbone of industrial development continue to be technologically backward and suffer from problems of sub
optimal scales of operations and technological

obsolescence.
26
Technological Backwardness of SMEs

Majority of the small scale units use old
techniques of production and outdated

machinery and equipment.
But with liberalization of the economy, the

MSMEs are facing stiff competition from imports and need technological upgradation in order to produce better quality products at cheap rates.
27
Sources of technology
In the MSME sector, technology is mainly sought in the form of processes and product know-how. Some of the other sources from which technology flows into the MSMEs are:Govt. Institutions Local suppliers of machinery and equipment Foreign suppliers Research and development institutions Industry associations Parent companies in case of ancillary and subcontracting units Collaborators
28
Problems
As far as sourcing technology is concerned, small businesses face the following three essential problems:I. II. III.
Obtaining information about the technology. Actual Procurement of Technology. Acquiring Finance for technology upgradation.
29
Reasons
Poor
financial situations and low levels of R&D
Desire
to avoid risk
from technology hubs.
Isolation
Non-availability
of technically trained human
resources
Poor
Lack
adaptability to changing trade trends

of Information
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Remedies
In order to enable SMEs overcome the above problems and enhance their access to new technology, it is imperative to give them a conducive environment, which includes: (1) Formulation of appropriate national policies and programmes; (2) Building up technological capacity; (3) Knowledge flows and technology databases; (4) R&D and inter firm linkages.
211
Present Scenario
According to the MSMED Act 2006 , MSMEs are defined on the basis of their investment in plant and machinery and equipment for enterprise rendering services.
212
Present Scenario
Micro, Small and Medium Enterprises (MSMEs) play a significant role in the economic growth of the country owing to their contribution to production, exports and employment. The sector contributes 8 per cent to the countrys GDP, 45 per cent to the manufactured output and 40 per cent to the countrys exports. It provides employment to 60 million people through 28.5million enterprises.
213
Present Scenario
SMEs exist in almost all-major sectors in the Indian industry such as: Food Processing, Agricultural Inputs, Chemicals & Pharmaceuticals, Electrical & Electronics, Medical & surgical equipment, Textiles and Garments, Gems and Jewellery, Leather and leather goods, Meat products, Bioengineering, Sports goods, Plastics products, Computer Software etc.
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Credit Linked Capital Subsidy Scheme

This Scheme provides for 15% upfront capital subsidy for technology upgradation for Manufacturing Enterprises. Technology upgradation under the scheme would mean significant improvement in the present technology level to a higher one involving improved productivity and improvement of the product. This also includes packaging techniques, anti-pollution measures, energy conservation machinery, on-line quality control equipments & in-house testing facilities.
2002 Southwestern College Publishing. All rights reserved. 215
Role of Polytechnics and ITIs
The scheme envisaged the Community Polytechnics to act as important centres for the application of Science and Technology in rural areas. As on date there are 780 AICTE approved Polytechnics covered under the scheme of Community Polytechnics. The scheme is run by the Ministry of Human Resource Development, Government of India.
216
SME Cluster Development
Special emphasis has been laid by the Govt. of
India on development of clusters and launched

a special scheme called Micro & Small
Enterprises Cluster Development Programme

(MSE-CDP).This scheme is for promoting technology upgradation in clusters for a group of MSME units of one industry.
217
Components of the scheme:

Diagnostic study, Formation of Association; Conducting awareness campaign, workshop, seminars, etc., Common purchase at lower cost, Resoursing of better technology, Creating marketing Hub, Common Facility centres, Common tool room, etc
2002 Southwestern College Publishing. All rights reserved.
218
QUALITY UPGRADATION SCHEME (QUS)

In order to encourage technology upgradation
and quality improvement in SSI sector and help

them prepare to face global competition, the O/o Development Commissioner (Small Scale Industries), Nirman Bhawan, New Delhi has introduced the following incentive schemes :
219
INCENTIVE FOR ACQUIRING ISO-9000 / ISO-14001 CERTIFICATION/HACCP : Provides for reimbursement of 75% of the amount spent for acquiring ISO-9000 / ISO14001 certification (or its equivalent) up to a maximum of Rs. 75,000/- to each small scale unit as one time assistance.
220
SCHEME FOR SETTING UP OF TESTING CENTRE :

The
objective of the scheme is to promote setting up of Testing Centres for testing the quality of raw materials, components and the end products as per the relevant standard specifications. The scheme provides for financial assistance equal to 50% of the cost of testing equipment and machinery subject to a maximum of Rs. 50 lacs as one time grant in aid.
221
NATIONAL AWARDS FOR QUALITY PRODUCTS : With a view encourage quality consciousness and the efforts of SSIs for quality up gradation and improvement every year certain products are selected for awards under this scheme. One National Awards is given for each category of the selected products. The award carries a trophy, a certificate and a cash prize of Rs. 25,000/-.
222
E-Commerce
Amount Right Lack
of Investment
Technical and advertising method of transport infrastructure Transaction facilities
Financial
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National Manufacturing Competitiveness Programme (NMCP)

The
objective of the Scheme is to sensitize the manufacturing MSME sector to the use of energy efficient technologies and manufacturing processes so as to reduce cost of production. second objective will be to improve the product quality of MSMEs and to encourage them towards becoming globally competitive. Cost of Rs. 140.98 crores in 11th Five year
224
The
Total
plan.
Components of the programme

Elimination
of waste throughout the business cycle through application of Lean manufacturing. To provide expert advice and solutions on real time design problems. Promotion of Information & Communication Technology in Indian Manufacturing sector. Mini Tool Rooms proposed to be set up by Ministry of MSME. Enabling manufacturing sector to be competitive through quality management standards & quality technology tools.
225
Conclusion
The growing competition in the market and excessive supply of consumer product creates pressure on micro and small enterprises and it has become necessary to increase the product quality, diversify and develop new products and make products more competitive in the markets. It has increased the need of technology to survive in the global market.
226
2002 Southwestern College Publishing. All rights reserved.
227

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Technological Upgradation in SMEs.

Presented by, Subhash Kumar & Shivam Rai

and importance of Technology Upgradation in SMEs.

role in Technology Upgradation.

What Technology is???

Need of Technology Upgradation

Standardization Cost Gain

Control Efficiency and Consistency

Technological Backwardness of SMEs

optimal scales of operations and technological

Technological Backwardness of SMEs

techniques of production and outdated

But with liberalization of the economy, the

financial situations and low levels of R&D

of technically trained human

adaptability to changing trade trends

Credit Linked Capital Subsidy Scheme

Role of Polytechnics and ITIs

SME Cluster Development

Special emphasis has been laid by the Govt. of

India on development of clusters and launched

Enterprises Cluster Development Programme

Components of the scheme:

2002 Southwestern College Publishing. All rights reserved.

QUALITY UPGRADATION SCHEME (QUS)

and quality improvement in SSI sector and help

SCHEME FOR SETTING UP OF TESTING CENTRE :

Amount Right Lack

Technical and advertising method of transport infrastructure Transaction facilities

National Manufacturing Competitiveness Programme (NMCP)

Components of the programme

2002 Southwestern College Publishing. All rights reserved.

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