Innovative Techniques and Strategies of Skill Building for Human Resource Development in SMEs, India

Abstract

India has gradually evolved as knowledge based economy due to the abundance of capable, flexible and
qualified human capital. With the constantly rising influence of globalization, India has immense
opportunities to establish its distinctive position in the world. However, there is a need to further develop
and empower the human capital to ensure the nations global competitiveness.
Despite the empathetic stress laid on education and training in this country, there is still a shortage of skilled
manpower to address the mounting needs and demands of the economy. Skill building can be viewed as an
instrument to improve the effectiveness and contribution of labor to the overall production. It is as an
important ingredient to push the production possibility frontier outward and to take growth rate of the
economy to a higher trajectory.
This paper focuses on skill development in Small and Medium Enterprise (SMEs) which contribute nearly 8
percent of the country's GDP, 45 percent of the manufacturing output and 40 percent of the exports. They
provide the largest share of employment after agriculture. They are the nurseries for entrepreneurship and
innovation. SMEs have been established in almost all-major sectors in the Indian industry. The main assets
for any firm, especially small and medium sized enterprises are their human capital. This is even more
important in the knowledge based economy, where intangible factors and services are of growing
importance. The rapid obsolescence of knowledge is a key factor of the knowledge economy. However, we
also know that for a small business it is very difficult to engage staff in education and training in order to
update and upgrade their skills within continuous learning approach. Therefore there is a need to innovate
new techniques and strategies of skill development to develop human capital in SME's.