BVMW, the German Federal Association of SMEs, represents the interests of small and medium-sized businesses with major companies in Germany, as well as globally. Medium-sized businesses contribute 99 per cent of all businesses in Germany and BVMW helps its members from small and medium-sized enterprises to create a shared environment of profitable business and commerce. In India, BVMW is led by Manoj Barve and is operating with a mission to empower Indian manufacturing through knowledge sharing, and technical collaborations.
There is a lot of scopes for Indian manufacturers to leverage the technological know-how from Germany. But the precondition is that Indian manufacturers should create a foundation based on the culture of R&D and collaboration. Indian industry will yield benefits from the German association only when the knowledge sharing and collaborative implementation will take place both at the levels of organizational alliances and academic partnerships. The need is to mentor and support Indian SMEs for more success stories and Germany being the global leader in manufacturing is ready to play a vital role to that end.
With an illustrious professional credential as a leader and facilitator of various capacities, Mr Barve is working for the exchange of ideas and business concern between German and Indian entrepreneurs. He heads the Indian chapter of BVMW, located at Pune. In an exclusive interaction with Machine Maker, he shares valuable experience and insights in the context of the collaborative objective of the association. “We are relatively new in India with BVMW completing three years of operation now. Through the Mittelstand Alliance, BVMW represents the shared economic, social and sociopolitical interests of 32 industry associations comprising over 900.000 members”, said Manoj Barve.
Manoj believes even if India has shown considerable improvement in ease-of-doing-business, the ground reality is rather different. In a price-sensitive market, Indian companies should focus more on RoI and quality than just producing parts. Also, India is not conducive enough for research, innovation and skill development. Students settling for comfortable jobs than research; All India Survey on Higher Education for 2017-18 shows 36.6 million students’ enrollments for higher education, less than 0.5% of the total went for doctoral/ PhD.
On BVMW Germany Manoj Barve says, “Markus Jerger is the Executive Director of BVMW – German Federal Association of Small & Medium-sized Enterprises. Through BVMW, Mr Jerger is the voice of these family-owned enterprises.” Mr Barve says that Mr Jeger works passionately in the interest of SMEs and represents their interests with the Government and other large organisations. “Despite being the head of an organisation of 900000 SMEs, he is easily approachable. I have personally taken up various India-related issues with him which he addressed with keen attention and promptly”, adds Mr Barve.
Mr Barve points out that so far manufacturing is concerned; the automotive segment was affected in Germany even during the pre-pandemic years, through 2018 and 2019. But the other sectors have been doing quite well. “In Pune, manufacturing is happening at seventy per cent to eighty per cent of its capacity with considerable success. But the biggest challenge has been the supply chain. The manufacturers are not getting material, and the available supplies are coming at an expensive price. But there has been a constant flow of orders.”
Even though the pandemic, when the connecting exercise has transformed into virtual interaction, Mr Barve does not see many problems with the network building. “We Indians have been rather adaptive to modern smart telecommunication technologies. But the challenge lies in Industry 4.0, where India is nowhere as compared to other countries. We lag in the implementation of Industry 4.0 that comprises automation, MI, robotics and 3D printing. The industry is not investing sufficiently in these segments.”
“In Germany where IIoT was devised; the manufacturers, academia, market and all the stakeholders are aligned for Industry 4.0. Being able to offer advanced technologies in automotive, tools and capital equipment, machinery, Germany provides consistent quality and precision in the products. Thus, Germany is adding value by the implementation of Industry 4.0 whereas India a long way to go to catch up even compared to the other Asian countries”, adds Mr Barve.
Presently there are associations for commerce like Indo German Chamber of Commerce working in much vigour. “The thing we are doing with German Association for Operation and Development is conducting webinars on R&D and industry-academia, internationalization of SMEs and innovations. Now with German Association for Operation and Development, we are developing a course in Industry 4.0 in cooperation with a college in Germany, a training course for future of manufacturing,” says Mr Barve. The participants of the training courses will be students from engineering faculties and the duration of the courses are presently being discussed upon.
There is a lot of apprehensions for German companies to come and join the Indian market, yet Germany cannot ignore India as a growing market. Mr Barve agrees that there is a vast difference between German and Indian SMEs so far standardization and price sensitivity of the Indian market is concerned. “We do not value the quality and consistency. Even India has shown considerable improvement in ease-of-doing-business, the ground reality is rather different. Issues with skilled manpower and export-import policies persist. India has a lot of people but it does not have a skilled workforce. The industrial skill is not given its due value till now.”
Mr Barve says that BVMW is focusing on R&D and innovation, and its investment. “Germany invests about three per cent of its GDP in R&D and innovation, whereas India is just 0.9%. The private industries are even worse at only 0.6% of their sales. It is in the skill development and innovation we need to invest.” He also highlights a glaring deficit. “In Germany, almost 50% of students go for vocational training, but in India despite a huge number of higher educated students, they have zero exposure to practical experience and are not employable at all.”
There are about one thousand eight hundred German companies in India. “Apart from twenty of them who are major players, the rest are all SMEs. But the key success of the German companies in the Indian market is due to their brand values and the majority of German companies here are machine and tools manufacturers. It is essential to have good machinery to manufacture high-quality products, but they are not able to sell them because the Indian market does not consider lifetime cost and consistency. It is the purchase price that matters to Indian users. I know a lot of German companies in Pune who are running on losses.” The market in India for high-end products is not sufficient enough. Mr Barve suggests these companies make in India and manufacture components in India for parent German companies or other subsidiaries.
BVMW has a team of dedicated people who work on a mission of bringing German and Indian SMEs on a common platform. “But India fails to replicate success stories of its SMEs. A lot of SMEs have similar characteristics of German counterparts. These Indian SMEs are most probably run by technocrats; they invest in innovation and R&D, value their workforce and they are in for the long term,” Mr Barve observes. So the culture of the SMEs in India needs to be transformed towards a more sustainable and quality driven manufacturing environment. “Employment in future will not be created in big companies and agriculture. It is going to happen in SMEs and startups.”