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How encouraging small businesses can revive the economy


The economy in India is now starring at a real slowdown. Gone are the days of massive growth, where consumption levels were high. Today, we need creative approaches to help people come out of the mess that most people find themselves in. Encouraging small businesses is the best remedy in this direction. This article is an attempt to discuss certain relevant points of such a remedy.

Introduction

Entrepreneurship is the key to revive the Indian economy. Some businesses are comparatively recession-proof and have the potential of increasing cash flow in a big way. The Government of India and the State Governments need to figure out the best ways to encourage small entrepreneurs. Some ideas in this direction are worth the effort. Firstly, the Government needs to set up a National Entrepreneurship Board immediately. This body should be a quasi-Government but a totally independent body, mandated with kick-starting the economy through Entrepreneurship. The aim of this body should be to oversee the functioning of State Entrepreneurship Boards which should be set up in every State. These bodies should have two eminent economists, two sociologists, and two Management experts. The State bodies should have frequent interactions with the Senior Managers of the Banks to set up concrete plans for reviving entrepreneurship. There should be a concerted effort to identify some five major thrust areas where the export potential is high. These small entrepreneurs should be properly guided to export their wares and the IT experts can also be engaged from the IITs and the NITs. The State Boards can really identify what can work and what cannot. While doing so, if creative entrepreneurship is able to flourish with a missionary zeal, the economy can simply take off.

Be that as it may, five areas where more technology-oriented research can support entrepreneurial activities in setting up commercially viable businesses can be centered around a) Environmentally sustainable substitutes b) Reusable products, particularly those that can totally replace plastic c) Small restaurants with focus on organic food d) Creative inputs to develop talents of school children and e) Supply-chain related entrepreneurship.

Environmentally sustainable substitutes

This is one area where there is seemingly tremendous scope. For instance, there is a sustained movement towards manufacturing pens, pencils and so on from waste paper. The pens and pencils are good indeed. All that needs to be done is to encourage more entrepreneurs in the manufacture of such products. The Government of India should give loans to such small entrepreneurs at an interest rate of 8%. The volumes should increase exponentially, as such products can have a multiplier effect in terms of sustainable development, where the environment is not spoiled at all. It is extremely essential that the scope is enlarged to include all such products that can save the environment from being spoiled. It should be noted that the market from such products is huge and can never diminish at any point in time. Such "assured market businesses" can generate good cash flow too for the entrepreneurs.

Reusable products, particularly those that can replace plastic

Tupperware, one of the well-known organizations of durable plastic products, also claims that their products can be recycled and used. One does not know how far this is true. However, the scope for innovation in terms of identifying alternatives, particularly those that can be melted in foundries is quite good. Even entrepreneurs who are now engaged in some business can be encouraged to manufacture such products. To give a simple example, why not have metal frames for televisions, laptops, washing machines, water coolers, water purifiers and so on? With a plethora of IITs and NITs. where there are so many world-class metallurgists, is it not essential that we need such environmentally sustainable and more durable products that can totally replace the existing plastic structures? Once this is done, the foundry manufacturers will be able to find out technology that can support the manufacture of such products. The aim is to have durable and long-lasting solutions that will minimize or totally eliminate the use of plastic, the number one enemy of environment protection.

Small restaurants with a focus on organic food

As long as there are people, they need to eat. And those who are always on the move, need to move fast too. For example, there is an explosion of fast-food restaurants. And organic food has already grabbed the attention of an entire generation of lovers of such food. This is all the more so, as there is a common perception that such food is also good for health, as most inputs on organic food items have anti-oxidants that can help anyone in maintaining good health.

By having a meeting with local unemployed youth, the District collectors can easily identify those who have potential and the interest to engage in small businesses. Once this is done, the banks should get into the picture. For example, even without much of bank support, one can see such restaurants doing roaring business in many localities of two cities -- Coimbatore and Madurai, in Tamil Nadu. Every State might as well have a good range of dishes that can be prepared out of organic food inputs. Once the momentum is seen, there is a good deal of scope for such restaurants to spring up just about everywhere and since the business is scaleable, there is always scope for expansion of the business and the cash flow is always good, as the business is a no credit business.

What is urgently needed is a change in will. The Central and State Governments need to get seriously into the act of developing at least one lakh new small entrepreneurs in every State. The MSME institutions and the specialized departments of entrepreneurship of the different Universities can be roped in for advice and for expert advice as well. The key is to get going immediately.

Creative inputs to develop the talents of school children

The creativity and out-of-the-box thinking capabilities of any child, after the sixth standard needs to be nurtured very carefully. We need to really identify a whole range of new entrepreneurs who can come with online lessons in several languages and not only English.

For example, this author is yet to see a single Youtube video explaining what is a cheque and a demand draft, or what are the major functions of banking and what a banking career is all about, in either English or Tamil, that can be easily understood by any eighth standard student. Such innovations are called for and these need not be restricted to just Youtube videos. It could be online presentations in different languages as well. Only when children are exposed to such different things, will they be able to see the bigger picture. Nothing happens in a vacuum. Even in tough situations, a little bit of creativity to do different things ought to come from the Government, the bankers, and the entrepreneurs. Once such possibilities are thought of and executed successfully, and viable business models emerge, it will become easy for the banks to provide credit for such innovative products.

Supply-chain related entrepreneurship

One learns that Supply-chain related entrepreneurship is on the rise in the city of Bangalore and to a lesser extent in Chennai. There are start-ups doing something like what the Ola does in taxi services, in the field of supply chain management, but reducing the cost of transport. The sky is actually the limit here and the scope is wide. The State Governments also need to encourage entrepreneurs who can link the small vehicles through IT and get the customers to benefit. Presently, the scope is seen to be high in metro cities. However, the scope is large in smaller towns too. All that needs to be done is to observe the present pattens and check if newer and better patterns of delivery are possible. To give a simple example, can one innovate in terms of helping people reach their heavy luggage from point A to point B, for a small fee? Reliability, assurance of safe handling and less cost will determine the chances of success. For example, if one entrepreneur can be encouraged to transport large personal goods from Chennai Central to homes in specific areas, the passengers might as well take just the city bus to reach their homes. This can happen only when they are damn sure that there will be no cheating and all personal goods will reach their destination safer and sometimes, much faster as well. The entire operation should be IT controlled and the passengers should be able to track the movement of vehicles carrying their belongings.

This is the sort of innovation that is needed. The State Government should encourage such entrepreneurship and allow it to flourish.

Conclusion

Entrepreneurship is the backbone of real-time growth, even in a slowdown. There are some businesses that are recession-proof. It is high time that we think of out-of-the-box solutions to make a good change to the economy and its revival.


Comments

Author: DR.N.V. Srinivasa Rao04 Oct 2019 Member Level: Platinum   Points : 5

Small businesses are the need of the hour. Everybody wants a job after completing their studies and if we are not getting a job we will blame the government for not providing us with a job. But instead of thinking of becoming an employee why can't we think of becoming an employer? Once this thought comes to our mind we can explore the various possibilities where we can start on our own small organisation either in the service sector or industry.

Many of the people who have the resources to start on their own may not have the required skills and knowledge about the field which are lucrative. People who have skills may not have resources. So bringing such people into contact with each other is the job of the government. I appreciate the idea of setting up a National Entrepreneurship Board. They can act as a mediator between the people who want to do some business and financial institutions. They can also maintain a directory of people who can guide the upcoming entrepreneurs about the line which they can select and train them in that line.



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