It is not an exaggeration to state that the Indian MSME sector is India’s backbone. As per the Ministry of Statistics and Programme Implementation, MSME contributes to approximately 30% of India’s GDP and 45% of exports. To ensure that the sector continues to grow at a much faster pace, it must be updated using the latest technologies and continue to innovate. Endconsumers and MSMEs can use innovations to enhance their operational efficiency. In this context, technologies such as the Industrial Internet of Things (HOT), artificial intelligence (Al), Machine Learning (ML), and Gen-Al provide the required building blocks to allow MSMEs to take advantage of innovation. Usage of AI/ML/Gen AI by MSMEs in Various Sectors These technologies provide MSMEs with opportunities for growth, operational efficiency and innovation. By adopting these, MSMEs can become more competitive, both locally and globally. As many of these technologies are relatively new, they provide the opportunity to have a level-playing field with large corporations. These technologies help MSMES automate mundane tasks, thereby reducing the budget need. These technologies provide additional insights that can help drive growth and tap into new markets. At a high level, AI/ML can be applied from two perspectives.
- AI/ML for Business: Leveraging AI/ML to derive efficiencies, optimize costs, and streamline processes.
- Business of AI/ML: Using Al/ML to expand to new markets, develop new products/solution/services and serve multiple industries/sectors. Various MSME sectors use these technologies on the basis of these factors.
A. Manufacturing Sector: The MSME Manufacturing sector accounted for approximately 35% of India’s total output. The MSME manufacturing sector uses AI/ML/GEN AI in the following areas but is not limited to:
- Operations Monitoring & Bottleneck Insights: One SME in the textile manufacturing sector used IОТ sensors to monitor the shop floor and feed this data into an Al-enabled analytics tool. This helps the given SME reduce inefficiencies by the order-15-20% and take advantage of substantial energy savings. The payback period for these investments was less than 2 years.
- Predictive Maintenance: An automotive parts manufacturer uses an AI-based predictive maintenance solution that helps identify the health of machines and plants in real-time. This helps
reduce the machine downtime, thus reducing the maintenance cost by approximately 12%.
- Automated Quality Control: IIT Kharagpur researchers have developed aportable Al-based device for the automatic inspection of goods manufactured in MSMES. The portable device clicks pictures of products when set up on a batch of goods and sends the feed to Al-based software for quality control. With the help of a computer vision-based quality control system, an SME not only reduces its defects but also improves its operational efficiency.
- Design Acceleration: A custom design manufacturer uses past data and customer preferences to recommend ornament designs. Gen-Al is used to create custom-made designs for customers.
- Design Innovation in Textiles: MSMEs use Gen-Al to perform faster design prototyping. One such SME uses Gen-Al to create faster design prints of T-shirts. There are many more examples, such as inventory control and customer support, that can help increase efficiency in the MSME Manufacturing sector.
B. Retail & E-Commerce Sector: The retail sector has been included in the MSME since Retail, along with the e-commerce sector, uses AI/ML/Gen Al in the following areas, but is not limited to:
- Personal Preference-Based Marketing: Al-powered tailored marketing, which is based on an individual’s preferences, not only helps increase the effectiveness of marketing but also reduces costs. This leads to an improvement of approximately 20% in the marketing costs.
- Customer & Market Trends: Al-enabled data analytics helps MSMES unearth hidden trends in customer behaviour and market dynamics. This leads to better positioning of MSMEs from a future perspective. This also helps to predict the demand based on past trends, which helps to reduce waste and, in turn, improve efficiencies.
- Chatbot for Customer Support: The initial level of customer support is provided by AIenabled chatbots, which helps reduce the load on human agents providing support. This trend is helping many MSMEs save effort and focus on other areas of market growth.
- Marketing and Content Creation Support: MSMES use Gen-Al to create marketing content in various local Indian languages. One of the Surat based textile exporter is using Gen Al to create catalogue in Hindi, Gujrati and English and saving efforts and increasing the reach of its products to wider customer base.
C. Fintech Sector: Fintech companies are among the biggest users ofthese technologies. Some use cases are following but are not limited to:
- Loan Worthiness Assessment: Creating a credit worthiness assessment with the help of data from alternative sources, such as social media and utility transactions. This helps create better and more accurate financial personalized products based on individual preferences.
- Fraud Detection: Fintech companies, such as Lending Kart, use Al-based fraud detection tools to minimize fraud. In summary, there are many more examples in which MSMES use Al/ML/Gen AI in various sectors to innovate and improve their operational efficiencies and growth.
Support from Ecosystem for Innovation: This was made possible by overall ecosystem support. The Government of India is supporting MSMEs to bring innovative culture by using the given technologies. However, some of these initiatives are following but not limited to:
MSME Sustainable (ZED) Certification Scheme: Support MSMEs to leam “Zero Defect & Zero Effect” practices
A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): Support to promote entrepreneurship and facilitate innovative businesses.
National Manufacturing Competitiveness Program (NMCP): Support MSMEs in various schemes for technology, quality, and innovation.
“AI Champions” Initiative from NASSCOM is good step in right direction by enabling MSMEs in developing essential world-class Al capability. This program helps MSMEs to acquire Al skills, develop effective Al strategies, and create new market opportunities. The India AI Mission by the Ministry of Electronics and Information Technology (MeitY) is supporting responsible and inclusive Al development in India. It has a special focus on innovation and skill development. These focus areas are helpful for MSMEs in adopting these technologies.
In conclusion, MSMEs are working along with ecosystems to co-create and adopt innovative solutions, which would take Bharat to become the third-largest economy in this decade.All the best for the same!
