ETRise Top MSMEs Ranking: India’s most innovative companies. Are you one of them?

The search is on to find India’s most innovative small company and if you think you have what it takes, ETRise Top MSMEs Ranking is the list you need to be on. Open to any Indian business that qualifies as a Micro, Small, or Medium Enterprise, as specified by the Ministry of MSME, Government of India, the top Innovations programme seeks to find companies thinking and operating outside the box.

To establish the meaning and for the purpose of measuring Innovation, OCED’s “Oslo Manual” will be followed. Certain changes are being made to customize it to the aim and outcome of the programme and tailor it towards the objective. Accordingly, innovation can be of the following types:

1. Product Innovation: Any new or significant improvement in a good or service. The improvement might be technical specifications, components and materials, software in the product, user friendliness or other functional characteristics.
2. Process innovation: New or significantly improved production or delivery method, including changes in technique, equipment or software.
3. Organisational innovation: Updating the organisational methods in the area of business practices and organisation’s internal and external relations.

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Framework and guidelines for measuring innovation
Oslo Manual has proved to be a reliable source of reference and establishing and computing innovation since the year 1992. For the purpose of judging ‘innovation’ for ETRISE Top MSME programme, we would be using much of the framework as outlined by OECD, along with certain changes in the criteria.

• Business innovation is introducing something new to the market or bringing significant improvements to the existing offerings (product, service or combination thereof) of the firm’s products or services.
• Business product can be a product or service (or combination thereof). All the core activities of the firm including production of products, ancillary or supporting activities are its business process.
• Introducing the product means making it available to customers for use.
• Introduction of the new business process means bringing it into the operations in the firm.
• The point in time when the new improved product or process comes into use is known as the act of introduction and is described as implementation.
• Business might often make further upgrades in the product after the implementation of the product has been done.
• A minimum of one or more new features should be introduced to the product of the business than the previous already existing features to be termed as an innovation.
• The minimum requirement for an innovation is that the product or business process must have one or more characteristics that are significantly different from those contained in the products or business processes previously offered by or used by the firm.
• The word “Significant” difference in a product does not imply to the small changes or improvements made.

Divergence from Oslo manual
However, ETRise Top MSMEs programmes has some divergence from the innovation criterion defined under the Oslo manual. Accordingly:

• Innovation should result in commercial, economic or strategic success at the time of measurement, leading to financial benefit for the firm
• Innovation should offer the society a positive value or should have positive impact for the firm
• Safety, health or environmental problems cannot be the resultants of the innovation.
• An innovation should create a competitive benefit for the firm.

Changes that are not innovation
For the purpose of the programme, it is important to understand what changes will not be considered as innovation. For example, the following will be excluded

• Changes or updates that are performed as a part of routine activity do not come under the head product innovation. For example: software updates in smartphones to get rid of coding errors.
• Introductions of small aesthetic changes in the product like change in colour or shape are not considered significant changes and hence would not be called product innovations.
• Any innovation or upgradation in a product that is not in implementation stage and just exists an idea or concept or prototype of the product, would not be known as product innovation even if people are already paying for it. This is because the the product might take longer time than expected to come into implementation stage or may be a fail overall.
• The outputs of creative and professional service firms, such as reports for clients, books, or films are not by default an innovation for the firms that develop them.
• A change that takes place as a direct result of a decrease in input cost is not an innovation. For example: reduction in the price of product as a result of a reduction in the price of materials used for manufacturing.

The above is a simple, abridged version of the rules that would be used to measure innovation. EconomicTimes.com reserves the right to change, modify and amend the rules of Innovation under ETRise Top MSMEs ranking.

Rule to measure innovation from OECD/Eurostat (2019), Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data on Innovation, 4th Edition, The Measurement of Scientific, Technological and Innovation Activities, OECD Publishing, Paris/Eurostat, Luxembourg.