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Thursday Nov 07, 2024
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By Lakshmi Venkataraman Venkatesan and Prof. G. “Anand” Anandalingam
The economic crisis that was brewing in Sri Lanka over the past several years quickly became international news. One of the worst financial crises to hit the country’s economy since independence presents a rare opportunity for the country to carry out long-overdue reforms. In order to improve Sri Lanka’s general economic climate, the Government should use the current crisis to try things it has never done before, such as macro-level interventions and robust policy measures.
We believe that encouraging entrepreneurship and innovation as a means of resolving the current predicament will yield the greatest return on investment. Macroeconomic measures could help ease the current financial crisis, but the nation should go on a road of fostering and accelerating grassroots entrepreneurship in order to have a long-term positive impact on the economy and stimulate growth.
Fostering indigenous entrepreneurship: Providing assistance to small businesses in remote areas
Recognising that Sri Lanka’s economy is primarily driven by Micro, Small and Medium Enterprises (MSMEs), which account for more than half of the nation’s GDP, is essential to enabling sustained improvement. The industry also contributes significantly to 45% of all jobs and has a real potential to put the country back on its feet. However, only 25% of these businesses are owned by women, and MSMEs led by women often struggle to transition out of the informal sector. Vulnerable groups like the Tamil youth who are struggling to find jobs and sustain themselves should not only be uplifted but empowered to become job creators instead of job seekers.
How to utilise grassroots entrepreneurship to revive Sri Lanka’s economy
The core of humanitarian organisations’ initiatives to rehabilitate livelihoods following the 2004 Tsunami was fostering of entrepreneurship. A Youth Entrepreneurship Development Program from the 1990s helped numerous young people establish their businesses with the help of a revolving loan and expert mentoring in the past. The program helped young entrepreneurs identify new clients and learn how to target them with appropriate offerings in in addition to offering them advice and training on how to start their businesses.
A robust micro-entrepreneurship program can be built to address the current crisis that has been roiling Sri Lanka by using the lessons learned during those post Tsunami years. Rural entrepreneurs can benefit from a methodical, step-by-step approach to education and training that will not only assist them in developing an entrepreneurial attitude and set of skills but will also direct them toward long-term business growth.
Emerging rural entrepreneurs may be motivated to develop their ideas through interactions with others and platforms like business competitions, entrepreneurial hackathons, and incubator facilities. The Yarl Geek Challenge is a good example of how contest-combined mentoring has created workable and successful businesses. These competitions will not only provide support but also ignite locals’ entrepreneurial spirit and remove their fear of failure.
Volunteer mentors can be enlisted to assist young people in starting micro-enterprises, ancillary units, and services businesses. These mentors may be experienced business owners, corporate executives, banking and finance experts, or college and university lecturers. One of the major interventions that can aid rural entrepreneurs in developing the necessary skillsets is step-by-step counselling of the local communities on how to approach a business idea, how to hire and retain resources to run a firm, how to access banks for a loan, etc.
Even when business owners have good ideas, it can be a challenge to convince a bank to give them the credit they want. Rural entrepreneurs can be helped to market their ideas to banks and investors so they can get business financing with the help of customised training. Such training wouldn’t only involve taking a conventional course to get certified; instead, it would give participants a thorough understanding of the workings of the industry and give rural entrepreneurs access to practical instruction from mentors who have received duly accreditation.
Establishing and/or encouraging a core group of mentors to assist aspiring business owners in transitioning from a start-up to a successful enterprise is one of the most crucial things the government can do. Step-by-step counselling of the local communities on how to approach a company idea, how to hire and retain resources to run a firm, how to access banks for a loan, etc. is one of the key interventions that can help rural entrepreneurs gain the necessary skill sets.
For instance, a young woman from Aurangabad who had recently lost her husband, received help to develop her business abilities so she could successfully launch and run her sportswear business. Mentoring support was extended to another young man from Pune who had learned fine art and worked as a graphics designer to launch his safety helmet decals printing business.
The biggest obstacle to a nation creating a successful network of micro-enterprises run by women and young people is a lack of enough funding. It can be difficult to persuade a bank to grant business owners the credit they need, even when they have solid ideas. The Government can assist in this by lowering restrictions on beginning business relationships with Indian enterprises.
For a country like Sri Lanka, agriculture and aquaculture are two excellent business prospects. The government must encourage agri-based businesses by enhancing the supply chain, improving financial access, providing training, and fostering the export of Sri Lankan agri-products.
It is time to re-establish and implement women and youth entrepreneur development programmes in order to reinvigorate the grassroots entrepreneurial ecosystem of Sri Lanka. This can assist intelligent and bright young people in becoming wealth builders and job providers rather than unemployed job seekers lining up for government handouts if approved and carried out in the right spirit. Time is of the essence!
(Lakshmi Venkataraman Venkatesan is Founding and Managing Trustee at Bharatiya Yuva Shakti Trust and Prof. G. “Anand” Anandalingam is Ralph J. Tyser Professor of Management Science at University of Maryland.)
