Training Needs Analysis for the SME Sector

Abstract

The Small and Medium Enterprise (SME) sector is a vibrant sector in the Indian economy, producing a wide range of industrial products such as machinery, machines, apparatus, appliances, electrical machinery, food products, beverage, tobacco and tobacco products, cotton textiles, wool, silk, synthetic products, jute & jute products, wood & wood products, furniture and fixtures, paper & paper products, printing publishing and allied industries, and also a large number of service industries. The SME sector of India plays a pivotal role in country's industrial economy. In fact, the SME sector can be considered as the backbone of Indian economy, contributing about 45% of the industrial output and about 40% of total exports. It gives employment opportunity to 60 million people, creates 1.3 million jobs every year and produces more than 6000 products for the domestic and international markets. The major advantage of the SME sector is its employment potential at a low capital cost. Labour intensity in the SME sector is estimated to be nearly four times that of large enterprises. SM Es are also responsible for driving innovation and competition in many economic sectors. The present study focuses on establishing whether lack of skilled human resources, along with poor management skills more broadly (including financial management, production management, human resource management, and marketing management) contributes to the poor performance of SM Es in the manufacturing sector of Bangalore, India. So study concentrates on the training needs of SMEs too. The study also examines the economic factors which have a direct influence on the performance of SMEs.