News: Not just the Indian biggies, SMEs too make it big

(DNA 13/04/2006) Mumbai - It’s not just the likes of Mittals, Tatas, Ambanis, Murthys and Birlas who are writing the big Indian growth story. Entrepreneurs leading the small and medium enterprises (SMEs) are also contributing in good measure.

The second annual survey of UPS Asia Business Monitor on changing opinions, attitudes and habits of business leaders from SMEs in the Asia Pacific region has revealed that Indian firms are not only the most optimistic on their growth prospects, but also likely to expand employee strength and business to other parts of the globe.

While the lithe and agile dragon (China) still remains a force to reckon with, India is fast catching up. In the outlook for future growth, India leads.

Around 35% of the Indian companies interviewed in 2005 see themselves doing ‘much better’ in the next 12 months as against 31% in 2004. When it comes to just doing ‘better’, though, the Indian votes slip a bit this year to 51% from last year’s 56%. However, the polls again swing in its favour, when asked on consistency of performance. Not one of the Indian SMEs thinks its performance will dip this year. Last year, a small 2% thought they would do much worse.

Now compare this with China. As per survey, Chinese firms are not betting big this year. In fact, the percentage of companies expecting ‘much better’ results has fallen from 47% in 2004 to 34% in 2005. There is marginal rise in the number of companies that see themselves doing ‘better’, from 32% to 34%. The votes for consistent performance have moved up from 17% to 29%.

The major distinguisher, which gives Indian firms several brownie points, is that more Chinese firms see performance ‘worse(n)’ in 2005 compared to 2004. This has gone up from 3% in 2004 to 5% in 2005.

The survey reveals that the biggest surge in trade volume for the Indian SMEs will come from the US, followed by Europe and Middle East. Almost 76% cast their vote for the US, followed by 65% for Europe and 57% for the Middle East.

Chinese firms’ preference is more tilted towards Europe (73%), US (63%) comes second for them, followed by Canada (58%) and Middle East (53%).

Survey says Indian SMEs would also be going on a hiring binge in the next one year. Over 71% of them claim they will recruit more people in the coming year, while only 1% say they will retrench.