Management of Technology in SMEs in Emerging Aviation Industry

in India
The aerospace industry in India is at a turning point. Several research and estimates have
predicted an exciting future for the industry. In the next 10 years, an estimated, INR 5 lakh crore
($ 100 billion) will be invested on acquisitions in the aerospace and defence sector in India. At
upwards of $50 billion, India has one of the largest defence budgets in the world. By 2019, it is
expected to be in the vicinity of $56 billion. In the commercial aviation sector, India remains one
of the highest traffic growth markets. It is estimated to become the third-largest aviation market in
the world by 2025, and will likely need nearly 1,500 new commercial aircraft by 2030.

The robust growth potential of the industry attracts original equipment manufacturers (OEMs) in
this sector to setup facilities in India. Although the gestation period is long, companies who have
made their capital investments are looking at CAGR of nearly 50 per cent every year. The
following six factors are driving forces for high growth:

i) India’s Strong Framework

ii) Government Policies
iii) India as an Aerospace hub
iv) Growing Competition
v) Large Pool of Manpower
vi) A highly vibrant SME sector

India has a strong framework to provide all requisite resources for this industry — research
and development capabilities, leading information technology and engineering services,
manufacturing expertise with global firms located in India, and a huge pool of semi-skilled
manpower. Entrepreneurs, who want to enter this field, and even existing players must recognize
the opportunities with the most yield.

Favourable policies made by the government have promoted expansion and growth in this
sector. The recent “Make in India” initiative has acted as a push for airframe manufacturers to
increasingly use indigenous aerospace suppliers. The policies introduced by the Ministry of Civil
Aviation have set a predecessor for government initiatives that would boost aerospace
manufacturing. The offset clause of a country defines the policy for rerouting procurement funds
paid to international contractors back into India. The Defense Procurement Policy (DPP-2016)
gave great benefits to Indian Defense industry.

Boeing, Airbus, Rolls Royce, Safran, etc. have started their R&D and manufacturing
activities in India. They have developed many outsourcing partners for design and manufacturing.
There are more than three million parts in a plane that requires hundreds of MSMEs to acquire
latest technologies and compete.

The Small and Medium Enterprises (SME) sector has emerged as a highly vibrant and
dynamic sector of the Indian economy over the last five decades. It contributes significantly in the
economic and social development of the country by fostering entrepreneurship and generating
largest employment opportunities at comparatively lower capital cost, next only to agriculture.
SMEs are complementary to large industries as ancillary units and this sector contributes
significantly in the inclusive industrial development of the country. The SMEs are widening their
domain across sectors of the economy, producing diverse range of products and services to meet
demands of domestic as well as global markets. Positions at tier 2/3 level in Aviation industry will
allow SMEs to lead with their capabilities and play across platforms and program, thereby de-
risking the business portfolio. Added to this, the additional capability of Indian SMEs to be flexible
and agile enough allows them to rapidly move into new competitive arenas where their identity
makes them well equipped to win.

Management of Technology is interdisciplinary fields that integrate science, engineering

and management knowledge also with practice. Management of Technology is set of management
disciplines that allow organizations to manage their technological fundamentals to create
competitive advantage. Management of Technology requires deep understanding of life cycles of
technology, product, process and system. Management of Technology is also a tool to catalyze
R&D. Technology management can act as a catalyst in propelling R&D programmed to achieve
faster rates of technological growth.

No study has been carried out on management of Technology in SMEs in emerging

aviation industry in India while it is very important area of research in current business scenario
for the success of Indian companies working in the field.

The Research Problem:

An investigation of:

a) The factors affecting technology and the methods and means used by the owners
and managers of manufacturing SME to address Management of Technology
issues in the context of aviation industry in India.

b) The effectiveness of a resource-based strategic Management of Technology

perspective in the research of these issues.