SMEs have come to occupy prominent role in the economic growth in many developing countries. They contribute to growth, innovation and jobs and are major drivers of innovation and employment.
In India, with approximately 30 million in numbers, SMEs play a critical role in generating millions of jobs, especially at the low-skill level. The SME sector should be accorded priority in our national planning.
Lack of communication to entrepreneurs about financing requirements, and education and skills shortages can serve as a potential constraint to having more business-driven employment in the country. The increasing unemployment rate is a pointer to the fact that the education system has failed many people. There are many business people who started with nothing but have built very successful companies.
Information and communication technology is a viable gainful field for the youth as well as SMEs. Web design and development can give young people formal digital skills and direct experience in the workplace, while helping SMEs get online in the process. The low digital capability of many SMEs is a huge limitation on their growth and productivity. Many SMEs are without a website; many young people can design a website, but lack the training and experience in the workplace to be able to use these skills to get a job. Civil society can help to build a link betweenthe two.
Empowering SMEs, Reducing Unemployment
Undoubtedly, SMEs in India continue to post their growth stories, there is huge potential among Indian SMEs that still remains untapped. Once this untapped potential becomes the source for growth of these units, there would be no stopping to India posting a GDP higher than that of the US and China and becoming the world’s economic powerhouse. For this the growing youth potential in the country needs to be harnessed by SMEs.
There is need for promoting awareness among young people of the opportunities and challenges of entrepreneurship and self-employment, and the role of young people in shaping their future and that of their country’s economic and social development.
Here are some recommendations to take the youth innovation forward. Some of these recommendations to the government include:
1) National and local governments should work together to make business registration as efficient as possible.
2) Government and education authorities should include self-employment as a viable alternative within careers advice.
3) Government should use existing structures, such as chambers of commerce, to support the development of youth entrepreneurship.
4) Governments should encourage schools and colleges to run business competitions that promote start-up opportunities.
5) Government should prioritise investment in youth entrepreneurship initiative to tackle youth unemployment.
The author of this article is Dr Arvind Kumar. He is the President of India Water Foundation, New Delhi.