MSMEs, Startups, and the Knowledge Economy: Integrating Innovation for Sustainable Development in India
Publication Date : 10-03-2026
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Abstract :
Micro, Small and Medium Enterprises (MSMEs) and startups have emerged as pivotal drivers of economic growth in India, particularly as the country transitions toward a knowledge-based economy. This study examines how innovation capacity within MSMEs and startups contributes to sustainable economic development. It explores the synergies between innovation practices, knowledge creation, entrepreneurial activity, and policy frameworks that spur competitiveness and resilience. Using a mixed-methods approach combining quantitative survey analysis of 10 MSMEs and startups across six Indian states and qualitative insights from 5 expert interviews, the research finds that knowledge assimilation and innovation significantly enhance productivity, market expansion, and employment generation. However, persistent gaps in access to finance, skill shortages, and weak linkages between academia and industry constrain performance. Policy recommendations include strengthening innovation ecosystems, targeted financing instruments, and bridging knowledge transfers between research institutions and enterprises. The study contributes to academic literature by offering a framework linking innovation inputs to sustainable socio-economic outcomes.
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