Driving Innovation in Indian Manufacturing SMEs: Success Stories and the Role of Incubators, Accelerators
Navratan Katariya, Director Innovation & Entrepreneurship, CoE-IoT&AI
The manufacturing sector in India—particularly its small and medium-sized enterprises (SMEs)—is the backbone of the country’s economy. But for many of these businesses, staying competitive in today’s fast-paced manufacturing world can feel like an uphill battle. Outdated equipment, operational bottlenecks, and limited access to capital often make it hard for them to keep up.
The good news? A wave of innovation is transforming how these businesses operate, thanks to advanced technologies and the support of incubators, accelerators, and organizations like nasscom’s Centre of Excellence for IoT & AI (CoE), an initiative of MeitY (Government of India) and various state governments.
In this blog, we’ll take a look at some real-world examples of how manufacturing SMEs are adopting innovative solutions, and how incubators, accelerators, like CoE are helping them thrive.
The Power of Innovation: Real-World Success Stories
At CoE, we start by identifying the key problem areas for SMEs through workshops, clusters, and government-supported initiatives. These engagements help us understand their needs and willingness to adopt new technologies. Considering that success stories motivate others to adopt, here’s how some Indian SMEs have leveraged innovative solutions to boost productivity, cut costs, and improve competitiveness:
1. AI-Powered Predictive Maintenance
One automotive parts manufacturer was constantly dealing with unexpected machinery breakdowns. The team felt the pinch every time production halted, eating into their profits. By implementing an AI-driven predictive maintenance solution, they were able to monitor machine health in real-time. This resulted in a 20% reduction in machine downtime and a 15% cut in maintenance costs, holding better planned spares.
2. IoT for Real-Time Production Monitoring
A textile manufacturer struggled with inefficiencies on the production floor but didn’t know where the bottlenecks were. After adopting IoT sensors to monitor production in real time, they identified the areas slowing them down and optimized their processes. The result? A 25% improvement in efficiency and significant energy savings. The best part? The IoT solution paid for itself within 9-12 months.
3. Cloud-Based ERP for Inventory Optimization
A food processing SME was losing money due to frequent stockouts and overstocking. After implementing a cloud-based enterprise resource planning (ERP) system interfaced with AI based algorithms, they gained full visibility into their inventory, reducing excess stock by 30%. With smoother production cycles and fewer headaches around stock management, the company saw a 6-month payback period on the system.
4. 3D Printing for Rapid Prototyping
An engineering components manufacturer wanted to stay ahead of the competition but was slowed down by lengthy product prototyping processes. By integrating 3D printing offered by innovative startups, they cut prototyping time by 80%, speeding up product development and slashing their time-to-market by 30%. The investment in 3D printing technology paid off in under a year, giving them a competitive edge and allowing them to bring innovative products to market faster.
5. Energy-Efficient Solutions
Energy costs were eating into the margins of a ceramics manufacturer. By investing in renewable energy and energy-efficient machinery, they reduced their energy costs by 20%. Although the upfront investment was significant, they achieved a payback within 18-24 months, along with some financial incentives. Thanks to real-time consumption monitoring and data-driven insights, they continue to benefit from long-term savings, all while improving their sustainability efforts.
6. AI-Based Quality Control
A precision engineering SME faced high defect rates, resulting in costly rework and customer dissatisfaction. By adopting AI-driven, computer vision based quality control systems, they reduced defects by 35%, which not only saved on production costs but also boosted customer satisfaction. Within 10-12 months, the technology had paid for itself, and the company now enjoys a smoother, more reliable production process.
How Incubators and Accelerators Are Driving This Transformation - While the potential benefits of adopting advanced technologies are clear, it’s not always easy for SMEs to make that leap. That’s where incubators and accelerators like CoE IoT & AI come into play, helping SMEs navigate the complexities of technology adoption and scale these innovations using solutions from startups. Here’s how:
1. Expert Mentorship and Technical Guidance
Not all SMEs have the internal expertise needed to adopt new technologies like AI or IoT. CoE offers mentorship from industry experts who guide both the solution providers and adopters (SMEs) through the process—from identifying the right technologies to ensuring smooth integration into existing systems. With proof-of-concept (PoC) projects, SMEs can try out solutions with lower risk and get hands-on support in turning ideas into reality.
2. Building Collaborative Ecosystems
Successful innovation doesn’t happen in isolation. Incubators and accelerators foster a collaborative environment where startups, corporates, and SMEs can work together. These ecosystems help SMEs partner with tech providers or other businesses to co-develop solutions tailored to their needs. For instance, a ceramics SME was able to partner with an IoT startup to monitor real-time energy consumption, saving thousands in monthly costs.
3. Reducing the Risk of Technology Adoption
For many SMEs, the fear of failure or financial loss can prevent them from embracing new technologies. Incubators help reduce this risk by offering trial programs and pilot projects that let businesses test solutions before fully committing. This "try-before-you-buy" approach builds confidence and ensures the solutions fit their operations. Startups who have earlier got good traction and successes are the front runners for such, some of the solutions also being SaaS based.
4. Expanding Market Access and Scaling
Incubators and accelerators also open doors to new markets. Leveraging their networks, these programs help SMEs access domestic and international customers, suppliers, and distributors. They provide guidance on how to scale successful technology pilots across multiple facilities or product lines, ensuring that SMEs get the most out of their investments.
5. Navigating Government Regulations and Support
Technology adoption can be daunting due to complex government regulations. Incubators often help SMEs navigate these challenges by providing legal and regulatory advice, securing grants, or connecting them with government incentives that support digital transformation. For example, many SMEs have benefited from subsidies tied to technology adoption, easing their financial burden.
The Role of NASSCOM CoE: Accelerating Innovation
NASSCOM’s Centre of Excellence for IoT & AI (CoE IoT) has been instrumental in promoting the adoption of advanced technologies in Indian manufacturing. Through partnerships with startups, corporates, and government bodies, CoE has facilitated the development and deployment of IoT-driven solutions that deliver real impact.
One such success story involved a precision tools manufacturer who, through CoE, was introduced to an AI-based quality control solution. The result? A **35% reduction in defects** and a happier, more loyal customer base. These kinds of collaborations show how NASSCOM CoE IoT is bridging the gap between technology providers and SMEs.
CoE provides access to cutting-edge technology, hands-on support, and an ecosystem of partners that help SMEs take full advantage of digital transformation. By fostering innovation, connecting SMEs with relevant technology solutions, and providing ongoing mentorship, CoE is helping transform India’s manufacturing landscape.
The journey toward innovation for Indian manufacturing SMEs isn’t always easy, but the rewards are enormous. Advanced technologies like AI, IoT, and automation are reshaping how SMEs operate, making them more efficient, competitive, and globally relevant. With the support of incubators, accelerators, and initiatives like NASSCOM CoE IoT, Indian SMEs are not only keeping pace—they’re setting the stage for a more competitive and resilient future.
As we look ahead, the future of Indian manufacturing is bright. The next wave of innovation is just beginning, and it’s the SMEs who are leading the charge.
