As I reflect on the recent ET Make in India SME Summit in Hyderabad, I found it invigorating to see firsthand how innovation, collaboration, and supportive policy are shaping the future of small and medium enterprises (SMEs). The event brought together business founders, experts, policymakers and visionaries to exchange ideas on scaling with impact and sustainability. For any entrepreneur or SMB leader seeking to accelerate growth, the lessons highlighted at the summit are truly transformative.
Table of Contents
- Why Scaling Your SME Matters in Today’s India
- The Importance of Innovation in Business Scaling
- The Role of Corporate Involvement
- Benefits of Subsidised Workspaces
- Funding Pathways: From Grants to Venture Capital
- Building a Talent Ecosystem
- Actionable Steps to Scale Your Business
- Summary
- FAQs
- Sources
Why Scaling Your SME Matters in Today’s India
India’s SME sector is the backbone of the nation’s economy, contributing almost 30% to GDP and accounting for around 40% of total exports. With over 63 million SMEs operating nationwide, their ability to scale determines not only their own survival but also India’s trajectory as a global economic power. Yet, only a small fraction of SMEs make the leap from startup to growth-stage, and even fewer reach national or international scale.
So what holds them back? Traditionally, limited access to capital, outdated business processes, talent retention issues, and regulatory bottlenecks have been key stumbling blocks. But what emerged at the Summit is that mindsets are evolving. There is an unprecedented appetite for growth and adaptation, fostered by digital transformation, government initiatives like Startup India, and opportunities to plug into global supply chains.
The Importance of Innovation in Business Scaling
One of the resounding themes of the ET Make in India SME Summit was the centrality of innovation. In today’s interconnected, rapidly changing world, simply replicating existing business models or relying on incremental improvements isn’t enough. Innovation means developing new products, services, processes or business models that give you a competitive edge.
According to a report by the OECD, businesses that embrace innovation outperform competitors by a significant margin, often doubling their growth rates. I’ve seen this up close: SMEs that adopt tech-driven solutions—be it through automation, AI, data analytics, or e-commerce integration—not only improve margins and efficiency but also reach new customer segments. This approach is especially critical as consumer expectations shift and supply chains become more complex.
Furthermore, innovation goes hand-in-hand with agility. During the summit, leaders cited the example of manufacturers who pivoted their assembly lines to produce PPE kits or sanitizer dispensers during the COVID-19 pandemic, staying both relevant and profitable while larger competitors floundered. Encouraging a culture where experimentation, calculated risk-taking, and creative problem-solving are rewarded must become a core tenet of every growth-focused SME.
The Role of Corporate Involvement
Another highlight from the summit was the urgency for collaboration between established corporations and emerging SMEs. As highlighted by The Star, corporate partnerships can be a game-changer for promising small businesses. Large enterprises bring with them deep domain expertise, established distribution channels, and international market access that would take years for a startup to build from scratch.
More than just capital, corporations can offer invaluable mentorship, technology licensing, and even customer acquisition opportunities through supplier relationships. For example, several Indian tech giants have started dedicated incubator or accelerator platforms, providing office space, technical infrastructure, pilot contracts, and cross-company learning to handpicked SMEs.
This approach is a win-win. Big businesses stay agile, refresh their innovation pipeline, and fulfill CSR commitments, while SMEs leapfrog typical growth hurdles and get validation in the market. The key, however, is to structure these partnerships transparently, aligning incentives so that both parties thrive.
Benefits of Subsidised Workspaces
Real estate and office costs are often a significant drain on startup and SME resources, especially in metros and tech hubs. Subsidised workspaces are designed to tackle this challenge, offering emerging businesses affordable, collaborative offices—sometimes with supporting amenities and services included.
As noted by Startup Story, city-level initiatives like those of Nagercoil Corporation exemplify how critical these workspaces are for early growth. By reducing fixed overheads, founders can devote more capital to product development, market research, or team expansion. Moreover, the co-location of multiple startups increases the ‘network effect’—sparked by informal peer learning, partnership opportunities, and a culture of mutual support.
Some workspaces go beyond desks and Wi-Fi, providing access to common facilities (conference rooms, 3D printing labs, distribution centers), on-site mentors, and connections with local investors or government liaisons. In effect, they act as growth platforms, not just places to work.
Funding Pathways: From Grants to Venture Capital
Financial resources are indispensable for scaling, and the summit illuminated just how diverse today’s funding ecosystem has become. Traditional bank loans are now joined by a spectrum of options: seed grants from government bodies, angel syndicates, venture capital, revenue-based financing, and even crowd-funding platforms.
Panelists emphasized that each funding route comes with its own expectations and trade-offs. Grants—especially those aimed at tech adoption, manufacturing scale-up or export promotion—can provide crucial risk capital in the early stages with minimal dilution. Venture capital can help unleash rapid growth, but usually requires a share of equity and a commitment to scaling aggressively.
The modern SME leader should be strategic, targeting the funding source that best matches their business model and ambitions. More importantly, financial discipline—keeping tight control over burn rate, cash flow forecasting, and investment prioritization—remains non-negotiable, regardless of funding stage.
Building a Talent Ecosystem
No SME can scale sustainably without nurturing and retaining skilled talent. The summit highlighted the paradox facing Indian SMEs: while there’s a demographic dividend and millions enter the workforce each year, the gap in job-ready digital and management skills remains wide.
Proactive companies are forging partnerships with local universities, hosting internship programs, and investing in continuous upskilling. In some cases, cross-company mentorship (within subsidised workspaces or industry clusters) helps spread best practices and encourages collaborative problem-solving. Companies that foster a learning mindset, flexible roles, and a culture of belonging often see much lower attrition than peers, which translates to compounding business returns over time.
Actionable Steps to Scale Your Business
The summit distilled countless lessons into practical, actionable steps for SMEs intent on scaling smartly:
- Embrace Technology: Invest in digital tools (CRM, ERP, cloud analytics, AI-driven marketing) that support your core business, drive automation, and provide data for better decision-making.
- Network Actively: Attend industry summits, local SME meetups, and leverage online networking to connect with mentors, collaborators, investors, and potential customers. The more relationships you foster, the more doors will open.
- Seek Funding Strategically: Identify at which growth stage you need capital, and approach the right sources (grants, angel investors, VC, banks). Always balance speed with control—don’t give up more equity or flexibility than necessary.
- Focus on Customer Feedback: Treat every customer interaction as a source of learning. Use data-driven and qualitative feedback loops to refine products, tweak service delivery, and create new offerings to address unmet needs.
- Build Talent from Within: Invest in employee training, provide opportunities for advancement, and create a purpose-driven, empowering workplace to reduce attrition and spark innovation among your team members.
- Leverage Subsidised Workspaces: If available, move into hubs or co-working spaces with other founders. Take full advantage of peer learning, shared resources, and on-site mentors.
- Establish Corporate Partnerships: Proactively seek strategic alliances with large firms for mentorship, market access, procurement contracts, and joint product development.
- Document and Scale Processes: As you grow, codify workflows and operational processes. Use technology to automate repetitive tasks and maintain quality as you expand to new locations or geographies.
Summary
Scaling a business—whether a tech startup, manufacturing SME, or service provider—demands vision, determination, and a strategic use of resources. The ET Make in India SME Summit made it clear: the formula for sustainable growth includes embracing innovation, forming value-driven partnerships (with corporates, academia, or the public sector), harnessing affordable infrastructure, and cultivating world-class talent.
For entrepreneurs willing to challenge legacy thinking and lean into the possibilities of digital India, the roadblocks of yesterday are rapidly turning into today’s opportunities. By applying these insights and remaining agile, SMEs can not only scale their own impact but also power the next decade of the Indian growth story.
FAQs
- What is the importance of innovation in business?
Innovation enables businesses to respond to changing markets, stand out from competitors, and discover new revenue opportunities. It’s essential for meeting customer needs efficiently and sustainably. - How can corporate involvement benefit startups?
Through funding, mentorship, technical support, and access to established markets, corporate partnerships help startups avoid common pitfalls and grow faster. - What are subsidised workspaces?
These are office environments provided at reduced costs, sometimes by local governments or private partners, to help fledgling businesses reduce overhead and access shared amenities. - Where can SMEs find funding resources?
Beyond traditional loans, SMEs may pursue government grants, angel investment, venture capital, family offices, crowdfunding, and revenue-based financing, depending on sector and maturity. - How do I retain top talent as an SME?
Offer continuous learning, clear career progression, an empowering environment, and recognition of contributions. Flexibility and purpose are especially valued by younger talent.
Sources
- OECD Innovation Report
- The Star
- Startup Story
- ET Make in India SME Summit (2024), Hyderabad
- Government of India, Ministry of Micro, Small and Medium Enterprises, Economic Start-up Outlooks
