Innovation Voucher Programme organized by GIZ and Ministry of MSME

MSME sector is has always been acknowledged and admired for dynamism, innovativeness, adaptability and maintaining a sustained annual growth of almost 10%.  While many of us have been debating on the topic that, ‘To enable innovation, the pre-designed schematic solutions are not always helpful.’ Different entrepreneurs facing different problems and we certainly can’t pre-suppose a problem or a solution with innovation. SMEs not necessarily have an issue on technology front only. They may have it in HR, marketing, IPR, etc. Innovation promotion measures usually focus only on technology upgrades and transfer and fail to contribute to the establishment of an innovation eco-system. There has to be cooperation and networking between different components that lead to innovation. It was therefore felt that there is a need of adopting new approaches to identify and tackle the well-known challenges faced by the SME sector in its pursuit of innovation. 

The idea of Innovation Vouchers (IV) is not new, however, it approaches the support to SME from a different angle compared to existing mechanisms and tools. Rather than supporting entrepreneurs on pre-decided areas, the Innovation Voucher concept aims to encourage entrepreneurs to come forward with their own ideas – where they want to innovate and with whom they want to cooperate.

Innovation promotion in MSME is done with an objective of an Improved Innovation System, which systematically promotes cooperation between industry, academia, & Govt. With reference to the aim of systematic cooperation between Industry and Academia there are few SME support programmes in India, which fund cooperation between industry and academic institutes. IVP is different from them as:

- They often have a specific objective outlined and thus provide very little flexibility for SMEs. 

-  Exploratory stages are normally not funded.

 -  - Existing support programmes are thus not suitable for enterprise who are looking to fully develop or define their ideas.

• Many existing support programmes mandate the industry to apply jointly with a research partner and are thus not suitable for small enterprises that usually do not know about potential knowledge partner.

The objective of the workshop was to understand and analyse the appropriateness, feasibility, schemes structure & implementation mechanism, different approaches, success & risk factors of ‘Innovation Voucher’ as a support instruments to facilitate innovation in SMEs – from Indian and International experiences.

As per the news, the two days Innovation Voucher workshop was organized by the Office of DC-MSME GIZ and FISME with knowledge support of the Tantsia FNF Service Centre (TFSC), Chennai. Addressing the workshop, SN Tripathi, Additional Secretary and DC, Ministry of MSME, shared, “There is a need to make India more and more innovative and Innovation Voucher is a concept which the country would like to adopt.” Citing example of how Blackberry and Nokia, despite owning enormous patents, lost its market to companies like Apple and Samsung. Mr. Tripathi added that innovation is very important, but commercializing innovation is even more important. MSMEs need to innovate according to the market need and before it is too late. Emphasis on quality is also critical for the sector to remain competitive.

Antonio Fanelli , Senior Expert, Organization for Economic Cooperation and Development (OECD), Paris, shared, “It is a well-known point that Innovation is behind the economic growth of a country. The SMEs cannot do innovation all internally and need support in terms of proactive policies, fund, marketing assistance, credit line, activities etc.”

Wolfgang Leidig, Programme Director, Private Sector Development, GIZ, quoted, “Nobody in the industry can afford to be at standstill and it is the better qualified product which makes the difference. The governments should focus on specific area like technology based innovation and sought views from foreign experts over their experience in different countries where IVP has already been implemented.”

Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME), shared, “The economies now are innovation driven rather than a resource or efficiency driven. When we are competing on value and not cost, it is called innovation.”

Many other experts suggested that keeping in view the focus on nurturing innovation among the startups; the scheme should cover start ups as well. However, the majority were of the opinion that the scheme mainly focuses on promoting innovation amongst SMEs as there have been several schemes introduced for the startups in the last two years.

The workshop was conducted within the framework of the Indo-German Bilateral Development Cooperation programme on “Innovation Promotion in MSMEs”, jointly implemented by Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH and the office of DC MSME, Ministry of Micro, Small and Medium Enterprises (MoMSME), Government of India.