Given the economic distress worldwide, the micro, small and medium scale enterprises (MSME) had been hit hard. Large numbers of workers have been laid off because of depressed demand, piled up inventory, pending retrievables and squeezed credit market. A sector which provides maximum employment cannot be left to fend for itself without a major transformation led by the entrepreneurs, policy makers and also other support organizations. There are several innovative options that one can try at four different levels such as (a) stimulating demand, (b) upgrading technology and skills, (c) promoting innovations for developing new products and services and (d) forging new partnerships among the entrepreneurs and also with the R&D institutions, grassroots innovation networks and the technology students.

Some of the urgent steps required are: (a) technology audit of MSMEs by formal R&D institutions, (b) Creation of National Innovation and R&D Fund for MSMEs, dedicated for replacing age old materials, technologies and production processes, (c) awards for innovations by and for MSMEs, particularly, engaging youth as attempted by Karnataka Council of Science and Technology and Indian Institute of Science, Bangalore and (d) dedicated R&D centres for various industrial clusters.

This is a painful time for the MSMEs and the workers being laid off. A bipartition approach is required among the major political parties to put forward a revitalization plan. Millions of workers and small entrepreneurs will anyway soon vote on the vision of the parties in taking country out of the current stressful situation.