Development hubs- a huge opportunity for big business to create market places in India


 Tipical  small income generating business: food offering
Tipical small income generating business: food offering
 Huge economic reforms have taken place in India since the 90s. Institutions have been created for more market effectiveness, regulations have been established to make markets work better. The agricultural sector has been opened up to global competition.   The development of the third sector, the so-called service sector has been going up. The most known service sector is the IT one which creates 4-5% of Indian’s GDP. But out of more than 280 million people, Indian’s workforce, just 2 million people are busy within the IT sector. Still, major challenges ahead are poverty, employment and inequality. Today, more than 80% of all workers are unorganized – with no minimum wages, no job security, unregulated job conditions.  Although some statistics are promising in terms of economic development, one trend is obvious: the inequality level is growing. But inquality is very unhealthy for a modern society: the latest news from Kerala where religious belief is connected to economic subsidiaries is just one bad virus that can lead to a huge crisis that effects not just economics, but even politics and society as a whole.

Less inequality, invest in poor and low services

The potential and the meaningfulness to invest in micro- economy is obvious. If all these people living under the poverty line or slightly above got more chances to gain money, completely new markets could grow. With a lot of site effects: better education, more health, a more balanced society in India and a lot of possibilities for international business to get access to new market places in the future. 

The big problem

Micro-investment will take more time as a traditional investment. Because investing in micro unities such as Selfhelp groups and tribal and rural structures will not cause immediately the big economic bang, for sure not the profit that by end of the year will be tangible and visible.  And because besides money- giving a real interest to develop is necessary. Development takes time. Not a few weeks or months, but at least a few years. The profit will come, but later as usual. A market can only re-pay once a marketplace has grown. Business is short term thinking, and for engaging in micro investments it has to change its expectations: from short- to mid- and long-term planning and strategies.

But let’s just imagine … what if some big players build networks and invest in a focused way in certain regions to enable the people living there to set up their own business ideas? What if investments are done  by collaborating with local NGOs who deliver missing skills to all these unorganized workers? What if the manufacturing activities which are still very low are supported more – in a planned, strategic way?

I met selfhelp groups, women who started to gain some money with tailoring or growing mushrooms, but they have no idea on how to market the products. They just sell it in the surroundings of 5 miles. No idea on design, no idea on online sales, no idea on how to market it at a high level. They do not even think about it – as they simply do not know and a few basics are not in place, such as Internet accessibility,  a vehicle, a few money to learn the missing skills… 

Probably, even smaller, but continuous  investments combined with trainings for poor people who are interested in setting up their own small business units could be very successful. 

We need to think development more as a crowd movement and to set up development hubs, where partners from different sectors work together to enable people to create sustainable marketplaces. The time of the one-to-one development has definitely passed! As long as the networking potential is not pushed, the old problems will still remain and inequality will become a real big challenge on all social, business and political levels. 

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