With over 67 million of its young people working in rural areas and entrepreneurship emerging as a top career option, Indian economy, which is projected to rise to US$5 trillion by 2025, has a huge potential to contribute to and profit from this expanding economy. In order to better understand the issues and opportunities for promoting Own Account Enterprises, Development Intelligence Unit and Development Alternatives conducted a pan-India survey titled “Insights into Rural Entrepreneurship” that included 2,041 rural businesses and 1,906 young enterprise aspirants between the ages of 16 and 29. The survey looked at the attitudes of young rural entrepreneurs towards entrepreneurship and their aspirations towards running their own businesses.
Due to the broad definition that ignores the demands of nano-level operations in peri-urban and rural areas, businesses in the micro category are frequently ignored in the policy framework while making a substantial contribution to the Indian economy. Nearly 30 per cent of India’s GDP is made up of MSMEs, who also create four out of every five new employment.
Over years, India has developed a stronger entrepreneurial culture. The perception is that this is only obvious in urban areas, where new businesses appear every day, yet it is clear that rural India has been completely ignored by the entrepreneurial surge. The migrants from rural and peri-urban areas are younger than ever, creative, aspirational, have greater educational levels, and have access to mobile and digital technology. The evident intent of young people to launch their own firms was one of the survey’s most important conclusions.
A supportive ecosystem has emerged in response to these burgeoning aspirations as a result of these dynamic energies toward entrepreneurship. The survey has provided some significant highlights on the changes in rural entrepreneurship in this environment.
Key outcomes of the survey
Aspiration for entrepreneurship: 44 per cent of young adults have dreams to start their own enterprises and be successful entrepreneurs. Compared to women (38 per cent), men (47 per cent) showed a higher level of curiosity.
The shift in behaviour: Almost 90 per cent of rural businesses are first-generation companies, indicating a change in the willingness to take risks.
Employment generation: Only 20 per cent of businesses have hired from beyond the village, 33 per cent have hired from both inside and outside the village, and nearly half of hiring occurs completely within the same village.
Access to support services: Only 11 per cent of rural enterprises had access to technological support while 13.4 per cent used any marketing support.
Credit access: 40 per cent of the enterprises cited a lack of funding as a barrier to expanding their operations. One in four of the companies said they needed marketing assistance as it was hurting their sales. One in six want connections to government programmes, possibly meeting their demands for both marketing assistance and money infusion.
The findings of the survey report were formally released on November 24, 2022, during JobsWeMake 2022, an event co-hosted by Development Alternatives and “la Caixa” Foundation. Speaking about the study, Kanika Verma, Lead, Green and Inclusive Entrepreneurship and AVP, Development Alternatives Group, said, “The study has brought to light the youth’s bursting entrepreneurial aspirations in rural India. The survey’s results show the growing need to create a supportive environment that is aware of local opportunities. On the approach to creating the pathways and encouraging the collaborations that can serve as the impetus for the emergence of the millions of future-ready micro-enterprises that are the foundation of the Indian economy, very little is understood. Such perceptions of rural entrepreneurship may serve as the basis for this goal’s advancement.”
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