Small is Beautiful

Rajesh Jain of raises 2 very important (and relevent) questions with regard to Rural India and SMEs (i.e. Small-Medium Enterprises) :

1. Why are SMEs small?
2. Why is rural India poor?

Rajesh’s analysis throws up some pertinent facts :

They are both very large markets and suffer from coordination failure ; There are huge information inefficiencies that exist in both, and significant gaps where Technology can help meet the needs.

In addition, I think part of the problem lies in our not being able to use *indigenous* technologies to the extent possible.

Very often, we make the mistake of trying to import a technology from a foreign land without adapting it suitably to local conditions. And then we blame extraneous factors when the implementation fails.

E.F. Schumacher advocates an alternative in his book – Small is Beautiful – where he profiles a number of “technologies”, developed locally, in response to local needs, that result in sustainable development and economic growth.

Closer home, I am told, a small unit in IIT(Bombay) is also trying to develop some home-grown solutions to home-grown industrial problems. So is the HoneyBee network of Professor Gupta in IIM(A).

There is another facet to this problem that has often bothered me : There is no dearth of Business Management graduates in this country, with business schools mushrooming in every nook and corner. Yet, a very small percentage of them end up becoming entrepreneurs or take up employment with SMEs.

I don’t know if the blame lies with an education system that is designed to produce “workers” not thinkers / leaders, or with our society for bringing up each generation with the belief that a “secure job” is the only way to a secure future, and that business is only for a fortunate few who have wealth in their family that they can afford to squander.

SMEs (and Rural India) would benefit tremendously with the influx of new ideas and learnings from these management graduates, if only they allowed themselves to contribute. And the students, in turn, would also get a chance to put their education to good use, instead of joining the corporate ladder on the 80th rung, hoping and wishing to make it to the top before they reach the ripe old age of 60 ! The way I see it, it would be a win-win situation. And the economy would benefit too.

Here’s hoping that we will see more such initiatives in the days to come…

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  1. Author’s Reply >>I couldn’t agree with you more, Atanu. My use of the word “indigenous” in fact does imply *locally-relevant* as much as possible. It does not matter where the technology / knowledge originates from. But the assumption is that home-grown technology would be more sensitive to local needs and would probably be less expensive to implement (on account of not having to fund the cost of research and development in economies that are in no way comparable to our’s in terms of purchasing power or cost of living.)The idea behind writing this post was to highlight the fact that very often we believe the solutions that come from outside are “superior”, without even giving local options their due consideration. And more often than not, these solutions / technologies we employ are not only more expensive but also not entirely suitable for local conditions. My point was exactly that : Let noble thoughts come to us from all Universe.

  2. I note the stress on ‘indigenous’ technology and would like to ask what exactly does that mean. Technology does not have to have a pedigree — whatever works is fine.Technology has to be understood in its broadest sense as knowledge. We have to recognize that it does not matter where the knowledge originates; what matters is that we are able to make use of it. Homegrown or local technology is not in any way superior by the mere fact of its genesis. What is important is whether it is applicable to a specific local condition. We should not care where a good idea comes from, as long as the idea is good. What we have to concentrate on is to seek out the ideas and adopt those that are beneficial to us. A mind that seeks whatever there is out there is a prerequisite for this. Like the Rig_Veda states: Let noble thoughts come to us from all Universe.Atanu

  3. may we ponder on the enormous potential for developing solutions for local problems ? Yet efforts are few and far has to look no further than Microsoft’s localisation of its Office Platform(i could be wrong about the product) for reaching out to the target segment which lives and works using the vernacular.some brilliant ideas never see the light of day owing to a lack of exposure,patronage or lack of critical mass.these reasons could be intertwined with one another.As for the trickle of management graduates into this entrepreneurial stream, it is not hard to understand the considerations of the freshly minted often takes a spirit of unconventional purposiveness aimed at the larger good,to step in and build an remains financially unattractive for these management graduates to strike it out on their own.surely one can’t wait for them to change their attitudes without a significant change in the mundane factors that surround any activity especially when it involves one’s work or career.An interesting and working experiment is the concept of micro-credit in bangladesh that extends financial assistance to rural women to empower solved a local problem and is showcased as a solution fit to be emulated elsewhere.

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