Fact Sheet
SME & Its Importance
India
Indian SME Ecosystem
MSME Gazette June 26, 2020
Union government of India has revised the definition of micro, small and medium enterprises to give them the confidence to grow. Under the new definition, the distinction between manufacturing and services enterprises has been eliminated.
The Indian Economy & The Indian SME Sector
Sources: Internal research and public sources
World
Percentage contribution of MSMEs to its country's GDP
Sources: Internal research and public sources
Contribution to Nation’s Employment
China
1
%
USA
1
%
India
1
%
Japan
1
%
Germany
1
%
SME Base
China
1
mn
USA
1
mn
India
1
mn
Japan
1
mn
Germany
1
mn
Family Business & Succession
India
- 43% of Indian family businesses do not have succession plan in place
- 12% make it to the 3rd generation
- 3% make it to the 4th generation
(Source – Family business survey 2016, National Bureau of Economic research Family business alliance)
USA
- 40% make it to the 2nd generation
- 13% make it to the 3rd generation
- 3% make it to the 4th generation
- Average lifespan of a family business is 24 years
In nearly 48% of all family business collapses, it was precipitated by the founder’s death or in 30% cases, the owner’s unexpected death. Only in 16.4% cases, the business failure followed an orderly transition and in situations where the owner was forced to retire, the figure drops to 6.1%.
