Entrepreneurial Assam: The journey must start now
Kalpajit Saikia
(The writer can be reached at kalpajitsaikia@gmail.com)
Last week, I was in conversation with the CEO of one of the topmost apparel and fashion companies in India. The Apparel and Fashion Industry in India is around US $ 65-bn market dominated by small unorganized players. Despite being the market leader in the industry, his company's market share is only around 2%. When suggested by my co-panelist that the present crisis provides them a great opportunity to expand market share as most of the unorganized players will be eliminated post COVID, the CEO replied "Indian Entrepreneurs are extremely resilient. They withstood lot of storms in the past and will handle this one also. Don't write them off."
He is right. India is always blessed with amazing energy, indomitable spirit and unparalleled grit of its entrepreneurs. COVID-19 situation is also a test of character of both India as a nation and its entrepreneurs. If the early indicators post the partial lifting of lockdown is anything to go by, recovery is not a distant dream.
It is expected that Indian businesses are going to emerge stronger once this crisis is over. The organizations have eliminated lot of inefficiencies already and built more agility and responsiveness in their business operations. Business models are revamped, new markets are explored and new sourcing strategies are put in place. Combine that with the drastic improvement in consumer sentiment once the war against the pandemic is won, India is on the way to a great rebound story. Movement of some companies from China will be the icing on the cake.
Indian States have already started working on revival plans for their Industries. Governments have formed task forces and started discussions with the Industries for smooth reopening of their business. Local administrations are assigned the responsibility of helping the manufacturing units to reopen and kickstart operations while enforcing the guidelines strictly. Restarting economic activities is very crucial for the industrialized States to support their high revenue and expenditure models. The revival efforts are not very difficult for Assam. Despite being one of the relatively better Industrialized States at the time of Independence, Assam's Industry contributes only around INR 1.58k crore to its GDP. This is less than the turnover of gems and jewelry maker 'Rajesh Exports'. This means there is nothing much to revive when it comes to Assam's industrial economy. Assam can put all its might in developing local entrepreneurship. Assam was never a breeding ground of entrepreneurship. Multiple agitations, lack of infrastructure, non-existent entrepreneurial spirit among locals and absence of consistent government push are some of the reasons the local enterprises didn't thrive in Assam. The limited entrepreneurship that Assam has seen is mainly because of enterprising outsiders, supply chain compulsions, lure of the natural resources or simply unavailability of government jobs. But all these can change now. The government has a great opportunity to start a new revolution of promoting local entrepreneurship. Five steps will surely help in this endeavour.
IDENTIFYING AREAS: The first important step is to decide the kind of enterprises to promote. Demand for the goods produced, low capex, ease of set-up and operation, access to raw materials, environment and capability to generate large-scale employment are some of the considerations. Once six-seven such sectors are identified, government should work with a single-minded focus to promote these sectors. Industrial policy should have special plans and incentives for these sectors, lands and other resources should be identified and kept aside, special economic zones should be created, yearly growth targets should be set and rigorously reviewed.
TECHNICAL KNOWHOW: The government should set up technology expert teams to support the entrepreneurs to start and operate their businesses. These teams should disseminate information on machineries, sourcing, best practices, safety processes etc., to the enterprises. Periodic trainings, helpdesk set-up and inspections should be done to help Industries run efficient operations.
CHEAP & CONVENIENT FINANCING: Special financial schemes should be made available to the entrepreneurs. The terms and conditions of traditional term and working capital loans may not be helpful when promoting an Industry from scratch. There should be substantial subsidies in capital investments and interest moratorium on working capital loans for the initial period. The interest rates should be very aggressive as there will be profitability pressure in the first few years of setting up the business.
PROVIDING MARKET ACCESS: This is one of the most important parts. While the local entrepreneurs can arrange the required resources to set up their businesses, selling their produce is always a Herculean task in this competitive world. The new entrepreneurs will take some time to reach the right buyers, promote their products and sell. There is always a threat of payment default by unknown buyers. The buyers may also not be keen to deal with new businesses. Government should step in to provide market access to the businesses. The best way is to set-up a sector-wise market promotion unit in collaboration with a reputed private enterprise to facilitate secure trade for the promoted industries. For the first few years, the industries should be encouraged to trade through the market promotion unit before they become self-sufficient to have their own sales and marketing wing.
TRAINING & DEVELOPMENT: Continuous training and development is required to ensure growth and sustenance of the new businesses. An agency for training and development for the promoted sector should be set-up. The training needs for each industry should be assessed every quarter and programmes should be designed accordingly. Training materials should be prepared in the local language and shared with the businesses.
CONCLUSION: The CEO of the company, I spoke to, was going through the toughest phase of his career. There is no business activity in the last 2 months as malls and high-street outlets are closed. Revival is also very difficult as fashion is the last thing a consumer will buy even after the situation normalizes. But when asked about what he is doing now to revive his business, he said, "There is always light at the end of the tunnel. We are rapidly digitizing our operations, removing our inefficiencies, making our systems better and focusing on how to provide amazing experience to the customer irrespective of the platform he wishes to visit. A new world will emerge post-COVID and we are making ourselves ready for that." This is exactly the excitement, enthusiasm and hope that Assam needs today. Is the government listening?