From tech to IPOs: Five trends for MSMEs in 2024
Micro, small, and medium enterprises will likely see several transformations this year. Let’s see what 2024 looks like for small businesses.
In recent years, India's micro, small, and medium enterprises (MSMEs) have shattered traditional conventions and embraced technology. Once deemed mundane yet operationally successful and profitable, MSMEs now have adapted to the changing times.
The year 2023 marked a watershed year for MSMEs. From digital integration to brand establishment, these enterprises have reshaped themselves to thrive in an intensely competitive business arena. This year, MSMEs are gearing up to adopt tech in the best possible way and streamline processes for better work culture.
Here are five trends that will shape up MSMEs in 2024.
Supply chain optimisation
Streamlining the supply chain workflow allows entrepreneurs to redirect their focus toward other business opportunities. Moreover, the integration of digital and tech within the supply chain minimises the arduous tasks typically associated with it.
Sonam Motwani CEO and Founder of , an on demand manufacturing platform, says that in supply chain optimisation, MSMEs are realising the transformative impact of real-time data analytics, automation, and AI-driven insights.
In the past few years, many startups have also come to the fore to help MSMEs in their supply chain operations like , , and , and the trend is expected to grow.
Ratish Pandey, a business coach and Founder of Ethique Advisory says, “The key objective is to minimise the "cash gap" and ensure a healthy cash flow. By adopting advanced inventory management systems and data analytics, businesses can strike the right balance between supply and demand, thereby enhancing financial sustainability.”
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Adopting tech/AI
Adoption of tech and AI is going to be a game changer in 2024. Shaurin Patel, Founder of additive manufacturing company Vexma, says that digitisation of spares/machine parts especially for those imported ones is going to make a difference which will help in reduce import lead times, custom duties, carbon footprint and save money in in inventory capital by producing on demand.
“Sort of pay as you go for the manufacturing sector especially for energy, oil and gas, automotive sector where they are being forced to order parts in a MOQ when they need few units,” he adds.
He also says that additive manufacturing or 3D printing will become a game changer since it will no longer be used for prototyping and testing the parts but for manufacturing functional end use parts for the on demand production
Streamlining processes
The year 2024 will also see MSMEs streamlining their processes. Be it their accounting, finance or hiring.
According to Motwani, entrepreneurs need to recognise that the adoption of technology is no longer a luxury but a necessity, streamlining operations, reducing costs, and ensuring agility in the face of dynamic market demands and this is the trend MSMEs will continue to see.
Mukesh Mohan Gupta, President of Chamber of Indian MSMEs also says that this year, MSMEs will streamline their HR operations.
IPOs to continue
Access to money is one of the biggest struggles of MSMEs and while lending is continuing to emerge with fintech and NBFCs (non-banking finance companies) are booming, Initial Public Offering (IPO) is a route which most MSMEs are preferring to take.
According to Amit Kumar, Founder of MSMEx, says, “while debt serves short-term needs like working capital or rapid, short-term expansion with high returns, fast-growing SMEs should consider other funding avenues and we are seeing that these enterprise owners are taking IPO route.” MSMEx is an education and advisory platform for small business owners.
He adds that long-term expansions with exceptionally high growth rates, unsupported by past financial records or bank collateral demands, often find equity funding as the most viable choice to fuel sustained growth.
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Sustainable practices
Adopting to sustainable practices is another trend which the sector will observe in 2024. According to SIDBI (Small Industries Development Bank of India), about 90% of MSMEs view cost reduction as the most crucial factor that motivates them to implement sustainability initiatives. Regulations rank the second-most important factor, at 80%, and 69% of MSMEs view willingness to support sustainability as the most important factor.
At YourStory’s TechSparks 2023 Delhi edition, Mani Vajipeyajula, who is the Co-founder and CEO of Banyan Nation, mentioned that sustainable practice in manufacturing industry holds a lot of potential in cleaning the environment. Vajipeyajula said he is optimistic about the growth of sustainability practices. Banyan Nation is one of India's first vertically integrated plastic recycling companies that helps global brands use more recycled plastic instead of virgin plastic.
In conclusion, the future of MSMEs hinges on their ability to adapt and upgrade within the dynamic business ecosystem which is expected in 2024, ensuring their sustainability in the long run.
Edited by Affirunisa Kankudti