Productivity gaps also remain stark. Each MSME worker currently delivers just 14 per cent of the productivity of a worker in a large enterprise, indicating significant potential for improvement through targeted upskilling and digital adoption
India will require an additional 3.2 million green-skilled workers by 2030 as nearly 45 per cent of core skills are expected to change in the coming years, according to a joint report by KPMG in India and the Confederation of Indian Industry (CII).
The report highlights that India’s micro, small and medium enterprises (MSMEs) — which employ 32.84 crore people and contribute 30.1 per cent to the country’s GDP — stand at a crucial turning point where talent development will determine long-term resilience and competitiveness.
At present, the MSME talent landscape is marked by fragmented skill levels, limited access to formal training and uneven digital readiness. Only around 10 per cent of the MSME workforce has received formal vocational training, while nearly 69 per cent of enterprises report difficulty in sourcing skilled talent.
Productivity gaps also remain stark. Each MSME worker currently delivers just 14 per cent of the productivity of a worker in a large enterprise, indicating significant potential for improvement through targeted upskilling and digital adoption.
The report underlines that the future of MSME work will be shaped by the “twin transition” — sustainability and artificial intelligence (AI). As businesses shift from manual processes to human–machine collaboration, digitally fluent and environmentally aware talent will be key.
To address these challenges, the report outlines six strategic imperatives: building an AI-ready workforce, expanding apprenticeships aligned with digital tools, adopting skills-first hiring practices, leveraging ONDC-led digital market access, developing cluster-based skill ecosystems, and promoting inclusive talent practices to drive transition readiness.
“AI will change how MSMEs operate, but skills will determine whether it creates advantage or risk. The twin transition demands a digitally fluent, sustainability-aware workforce ready to innovate at speed,” said Sunit Sinha, Partner and Head, Human Capital Advisory, KPMG in India.
Naveen Aggarwal, Office Managing Partner, Delhi-NCR, KPMG in India, described MSMEs as the heartbeat of India’s economic ambition, adding that the next wave of growth will depend on investments in high-value talent and governed capability.
