Often referred to as the engine of growth in India, MSMEs have played a prominent role in the development of the country’s economy. Rama N.S., CEO of the Electronics City Industries Association (ELCIA), in an interaction with Baishakhi Dutta of Electronics Bazaar shares how the cluster is empowering the growth of MSMEs through the creation of state-of-art manufacturing facilities, to be used on a shared basis.
EB: How do you view the current state of the Indian ESDM sector, as well as the local R&D and product design scenarios?
Design has always been the strength of engineers in India. Chip manufacturers the world over are using the services of our design houses and R&D centres. However, manufacturing has still not taken off to the extent that is required to meet domestic demand and curb the import of electronics. We understand that some projects are under construction and will take time to become operational. Considering the low or virtually non-existent component base in India, the design and development of niche products are key value adds, as of now. There is an urgent need for investments in the ESDM sector for large scale manufacturing, for which support from the government is needed to get the industry on track. Besides, our niche products with great technical features also need to have a better appearance or visual appeal.
EB: What are the aims of the ELCIA cluster and how do you plan to fulfill them?
The Electronics City Industries Association was formed in 1992 as the members wanted to come together to get basic infrastructure like streetlights, roads, water and security, which were lacking. The idea was to draw the government’s attention to the condition of Hosur Road on the outskirts of Bengaluru, and get it to improve other infrastructure essentials for businesses and the general public. ELCIA had earlier addressed the infrastructure requirements of its members. Now that the ELCITA (Electronics City Industrial Township Authority) is responsible for township management, ELCIA focuses on interactions with the government, offering business related support to members and skills development.
The ELCIA cluster was formed to set up the common facility centre (CFC) for MSMEs, under the CDP (Cluster Development Programme) of the government of India, to help them design and develop innovative products and to increase their business turnover by augmenting manufacturing. The CFC centre is now operational and is being used by MSMEs. Small companies can use the facility for R&D and small volume manufacturing with minimal investments. This can encourage startups to build innovative products. All the equipment is in place and members have started using it. We believe the facilities will be used by many more to develop and manufacture newer products and components
EB: What role do the ELCIA members play in this major initiative?
ELCIA is acting as the bridge between the government and the companies as it is not possible for individual companies to go to the government, resolve issues, get subsidies or implement policies. So, we collectively represent all members of ELCIA and work on policies with the government. Creating awareness among members regarding government policies and offering support during implementation is also being done by ELCIA.
EB: Is this centre aimed only towards ESDM companies?
Not necessarily. Though this centre has the capabilities for the design and manufacture of electronic products, it can be used for developing mechanical parts, environmental testing, packaging, etc. Just as examples, water meters, sheet metal items, aerospace parts and poles for streetlights can be manufactured at this facility. Today, most of the products require electronics and communication components, and the ELCIA cluster’s common facility centre can cater to such requirements. We believe this will inspire entrepreneurs to come up with innovative IoT products that use multiple engineering disciplines. Our facility can be used by any company that wants to build a new product or augment its production plants.
EB: What is the process for applying for the use of this facility, and what is the cost involved?
We encourage and welcome everyone to use this facility. Details about it are available on the cluster’s website. As of now, the majority of users know about the cluster as they are based within the Electronics City in Bengaluru. Such companies request for quotations for the services they plan to use at the facility, after which they make a booking. Companies can bring their designs and raw materials to the centre and take back finished end products. The cost is computed based on the usage of machines and equipment, as well as the manpower needed.
EB: How do you plan to promote this scheme further and reach out to people who are not yet aware of it?
We have set up the facilities completely and the machine shop has been in operation for a year. We update our capabilities regularly on our website, and communicate these to our members through emailed newsletters. We are actively participating in exhibitions across the country. Being the first electronics cluster, the government is also helping us in creating awareness by sending interested industrialists to our centre.
Our members promote this facility through their networks. Those who are members of other associations too, like Clik (Consortium of Electronics Industries of Karnataka), Kassia and CII, have many opportunities to communicate through their networks. While we are making an effort to create awareness, media channels can also publicise the availability of the CFC and thus help MSMEs/startups. We plan to do much more to ensure this state-of-art facility is effectively used by the industry.
EB: Will you help MSMEs get proper certifications for their products?
Certifying products is a service that we are planning to offer. But the facilities in the cluster must stabilise for that, and we must acquire both experience and additional equipment. Currently we only have an environmental testing facility.
EB: Will you offer any handholding to companies manufacturing products developed at your centre, or do they get access to the machinery only for a certain period?
We do have our own operators at the CFC but often, companies bring their experts to get the job done. This cluster facility helps members to network, share best practices and learn some secret sauces from each other. Cluster members have the capability to handhold new companies and startups. When a company has developed a product, we believe its team members know the process much better.
EB: Are there any plans to provide training for MSMEs?
Skilled manpower is critical to the success of MSMEs. While big companies have training departments, the training overhead costs can be expensive for MSMEs. Though the government has announced good policies for skills development, implementation is still a challenge. We believe training and skilling is required at all levels.
ELCIA has already started providing training for MSMEs and aspires to be a professional training provider. It has a collaborative approach and is partnering with GIZ and Bosch, which have some of the best training implementation experience. Partnering with CII and other associations will enable us to network with companies in other spaces. ELCIA will use the cluster for imparting generic hands-on training to apprentices. Our vision is to provide training to all employees, right from the entry level to senior management—both in content and soft skills, with an emphasis on current industry requirements and on-the-job training.
EB: How do you foresee this initiative shaping the future of the Indian electronics industry?
Indeed, it’s a great initiative by the Central and state governments. We feel that such a facility needs to come up in many more places across the country. The requirement for electronics is huge in the country and the demand is continuously increasing. While such common facility centres can pave the way for niche and innovative products, bigger and faster investments are required to reduce India’s import bill.
MSMEs have a great role to play in designing and manufacturing niche electronic products. Having such shared facilities will help them manufacture the products at a reasonable cost as, in general, the cost of investments in the Indian manufacturing industry is very high. This high cost can dissuade many, making them shelve their ideas or getting them into financial trouble. In view of this, we believe the centre is a stepping stone for ESDM manufacturing in the country.
EB: What is your funding model? Who are the member organisations in the ELCIA cluster?
The investment made in the machinery is close to ₹ 145 million. The government of India and the state government of Karnataka have given grants that cover 70 per cent and 15 per cent of that cost, respectively. ELCIA and its cluster members have contributed the balance 15 per cent, while the building is being provided by ELCIA.
The ELCIA cluster has around 34 MSME member companies. These include Radel, Synthesis, Bhavani Industries, Syscon Calibration, Tescom, VXL, Hical, Customised Technologies, Konar and many more.
EB: Tell us about the government’s (Central and state) contribution to push this initiative forward further.
The Central government is indeed doing a great job to promote such initiatives and for the next five years, the cluster’s operations will be monitored. By gaining confidence from the first few clusters as pilot operations, many more clusters are likely to be approved. The government of Karnataka has also come up with its own policy for MSME cluster funding with 80 per cent participation. We are sure the government will refine the policies further and expedite the implementation of such facilities across India to cater to the manufacturing of all types of products, while offering a range of services.