Q.‘Innovation is integral to MSME’. Discuss giving reasons to your answer.

Because MSMEs lack the scale and capital that large firms have, their ability to survive and grow depends on continually finding new products, markets, input sources and methods — in other words, on innovation. …

Innovation is integral to MSME. Reasons:

• Entrepreneurship — the heart of MSME — is innovative by definition — By combining factors of production, the entrepreneur creates goods and services that meet society's needs. Innovation may be cost-saving or revenue-enhancing (best when both), and includes new products, new markets, new sources of input supply, technological breakthroughs and newer organisational forms — doing things better, cheaper, faster and with least harm to the environment. Innovation must become a habit.
• Innovation is their competitive strength — MSMEs cannot match large firms in scale or capital, so they compete through grass-roots innovation and low-cost manufacturing using local skills. This is why many global companies seek strategic partnerships with Indian MSMEs, drawn by their innovative strength. …