Are you building enterprises or developing entrepreneurs?
My answer used to be "developing entrepreneurs" because I understood that to necessarily be the mandate for a project focused on "self employment". The longer I work here on ground however, the more dissatisfied I get with focusing on making individuals self-employed rather than focusing on the bigger picture in the self employment sector. The dissatisfaction comes from observing that the institutional environment is highly non-conducive to becoming successfully self employed, especially at lower income levels. Instead, there is:
(i) limited infrastructure for base-of-pyramid entrepreneurs - financial access, market linkages, strategic advice, skill development, basic business information
(ii) an appropriately widespread reluctance to becoming an entrepreneur - limited cultural infrastructure
The lack of a supporting environment combined with the extent of poverty, livelihood, and entrepreneurship challenges, means that one has to either decide to work at the individual level and invest heavily in developing individual entrepreneurs and their enterprises, or chip away at these systemic issues and help create an enabling environment that sustains entrepreneurs developed by other incubators and initiatives.
It is undeniably necessary to do both. Further, in economic development there are no clear linear pathways; one can't simply answer questions such as: Which comes first? Building the micro and small enterprise sector or building individual enterprises? In addition to contextual and logistics related factors, which approach one chooses also depends on whether one is a big picture person who likes to connect dots across sectors, or a "micro" person that enjoys engaging with the entrepreneurs and their operations on a day to day basis.
Within these levels of work, there are further choices of focus if one wants to empower entrepreneurs and help create a thriving small and micro business sector:
- skill and vocational education/training
- entrepreneurship and business development education/training
- enterprise building and entrepreneur handholding
- building/strengthening supply chains, entrepreneur networks and marketing platforms
- advocacy for (and design of) administrative/regulatory/financial reforms in the MSME sector
My own skills and interests lie in looking at systems, understanding local social and economic institutions, and figuring out how to strengthen existing governance and administrative systems so that larger scale change can be effected.
As a result, I'm much more interested in taking this first year of the project to understand some of the on-ground core issues that plague micro and small enterprise owners in this underdeveloped eastern part of India, and design (and implement) interventions that target these core problems.
In reconciling my own preferences to those of the project's stakeholders, and in recognising the fact that I need to work with enterprises, entrepreneurs, and entrepreneurship ecosystems to understand the local context better, the project model seems to have evolved as follows:
(I) Creating entrepreneurs and enterprises de novo
This is approximately the way forward for the stitching centre, with steps 1-3 being completed, the phase wise plans (steps 4-6) being in place, and market linkages (steps 7-9) already being invited.
- Engage with the community to understand the existing skill sets, and the kinds of livelihoods favoured (for whatever cultural, social, or economic reason)
- Understand the business opportunities in the local markets
- Focus on creating local market linkages first so that these linkages can be easier sustained by these local, low income entrepreneurs and the scale of production / provision kept initially low
- Understand the skills required to tap these business opportunities, and create a phase-wise plan to train target beneficiaries in these skills
- Have a plan for plugging in skill gaps in the initial stages of the enterprise (e.g. supervisory and managerial positions can be filled by individuals that have experience and need help, but are not target community members)
- Create a business plan, start training-&-production so that livelihoods can be quickly generated, thus motivating more target beneficiaries to join the enterprise-related activities
- Evolve a plan for assessing performance and emerging talents of trainees, and assign them roles of greater responsibility and decision making (creative designers, supervisors, managers, marketing and sales)
- Evolve a plan for encouraging individuals or groups to become autonomous, create different business models, and link to new marketing or production channels within the safety of operating within the existing structure.
- Develop different kinds of businesses (with corresponding linkages) that use the same core skill sets as used for the initial livelihoods phase of the enterprise. For instance, teach tailoring and create groups such that some are involved in uniforms production, some in boutique supply, and some in direct tailoring for customers.
(II) Interventions targeting existing micro/small enterprises to make them more profitable
- Identify a few sectors that hold the most business opportunity (in local or regional markets)
- Identify micro businesses that operate within these sectors and either show potential for growth, or whose entrepreneurs are interested in scaling up/diversifying/becoming more successful
- Identify sector wide problems at the micro and small business level
- Identify specific roadblocks for the individual business or entrepreneur
- Either do a one-time, customised intervention for an enterprise showing great promise, thus benefiting to a large extent a smaller number of enterprises
- Implement an intervention to solve 1-2 of the most pervasive challenges of one specific sector, thus benefiting to a smaller extent a larger number of enterprises
- Use either microfinance partnerships for directly financing individual enterprises to implement the new strategy, or get investments / grants as an organisation to implement the broader intervention
(III) Development of local/regional supply chains or common marketing platforms
- Identify a few of the sales & procurement channels or marketing hubs related to the community or urban area of interest to the project
- Strengthen these existing platforms via IT innovations, improving face-to-face communication options (small scale trade fairs for specific business sectors for example), teaching new marketing strategies to enterprise owners, linking to designers / architects / brand firms for 'facelifts' of storefronts or market areas, creating new marketing hubs in less accessible areas (such as mobile vans or stalls near neighbourhoods away from the city centre) etc.