Rural Entrepreneurship – Is it Going Up the Ladder?

Rural entrepreneurship is defined as entrepreneurship whose roots lie in the rural areas but has a lot of potential to drive various endeavours in business, industry, agriculture, etc. and contribute to the economic development of the country. India is a country of villages. Nearly 70% of its major population reside in villages and their livelihood is supported by agriculture and allied activities. Thus the nations’ economic development depends largely on the standard of living of the people who live in the rural areas and the level of development which has actually taken place there.

Indian agriculture is exposed to low productivity, natural calamities, agriculture & cash crop mismatch, disparities in various public private partnerships. Since the land area for agriculture is limited, not everyone is employed. This leads to migration of people from rural to urban areas.

Mahatma Gandhi had quoted, “The real solution to the problems of this country is production by its masses and not mass level production.”

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Rural development can be made possible through the growth of rural entrepreneurs which further would contribute in reducing levels of poverty, unemployment, etc. Rural entrepreneurship also means rural industrialisation.

How can development take place in rural areas?

a) Local resources should be used optimally for an entrepreneurial venture and the farm produce distribution should be improved.

b) This entrepreneurial occupation would lower down the levels of discrimination and reduce the number of migrants from rural to urban areas.

c) 6M viz man, money, material, machinery, management and market must be provided for rural entrepreneurship to be a revenue generator.

Types of Rural Entrepreneurship: - There are four basic types of rural entrepreneurship. These are: -

a) Individual Entrepreneurship

b) Group Entrepreneurship

c) Cluster formation

d) Co-operatives

All the village industries come under the umbrella of opportunity or areas where rural entrepreneurship can evolve. Some of these are agro based industry, forest based industry, mineral based industry, textile industry and engineering services.

Need for rural entrepreneurship: -

a) Reduce the levels of unemployment. The occupation provided by rural entrepreneurs would serve as an antidote to this.

b) Reduce income disparities.

c) Reduce the number of migrants from rural to urban areas.

d) Balanced regional development.

e) To build up village republics.

f) Preserve the heritage of the country through art and creativity.

g) This leads to economic development of the rural areas and country as a whole.

Challenges for rural entrepreneurs: -

There are a number of bottlenecks which create difficulties in efficient working of the rural entrepreneurs. These are: -

a) Lack of technical expertise among the rural masses.

b) Financial constraints.

c) Lack of training modules and support services.

d) High cost of production.

e) Expensive quality control which if not adhered to lowers down the standards.

f) Storage and warehouse issues.

g) Lack of marketing and promotional strategies.

h) Low levels of education.

How can rural entrepreneurship be promoted to the masses living in the villages: -

a) Soft and easy conditions for financing budding entrepreneurs.

b) The raw material base should be strengthened in the villages.

c) The production centres can be made the marketing end points and thus solve issues faced regarding the same.

d) Development of entrepreneurial attitude among the local masses by imparting entrepreneurial education at school and college level.

e) Provide and educate them about various benefits and facilities available for rural entrepreneurs.

A basic framework for promoting rural entrepreneurship in the villages is shown below in the form of flowchart.

Effect of Globalization on rural entrepreneurship: -

To establish a causal linkage between globalization, a macro concept and rural entrepreneurship, a micro concept is a tedious task. However it is somewhat easier to identify channels through which the aspects of globalization can impact the rural industries to a extent of its welfare.

a) Global production and efficiency can serve to be the benchmarks for the local entrepreneurs.

b) Improved access to foreign technology.

c) Trade openness results in faster growth.

d) Various policy benefits at national and global level.

Opportunities for rural entrepreneurs: -

a) Rural Entrepreneurship Development Programme

b) Regional Rural Development Centres

c) Social rural entrepreneurship

d) Food for work program

e) Bank of technology

f) Rural innovation funding

In the last three decades, across the world there have been major shifts in rural economies. Rural enterprises are important generators of employment and economic growth both locally and internationally. It is important to stress that rural entrepreneurship in its core essence does not differ from entrepreneurship in urban areas. Entrepreneurship in rural areas is finding a unique blend of resources be it within the boundaries of agriculture or outside.

This article has been authored by Lovina Murdia