‘Vriksh bola paat se, sun patte meri baat, Is ghar ki yeh reet hai, ek aawat ek jaat.’
(The tree tells its leaves, hear me out you leaf. It is a tradition in this house, one comes to being and one reaches its end.)
These lines from Sant Kabir Das have always had a profound philosophical influence on my thoughts.These words are also key to understanding change and fighting fear in these times. The COVID-19 outbreak, the lockdowns across the world and the disruption to the normal growth trajectory has created panic across economic classes in the country. The rich see their net worth sliding down drastically, the poor are struggling to manage their livelihoods. Parts of the country have seen a mass exodus of the migrant population.
Particularly vulnerable in the business world are the small and micro enterprises. A recent study by the All India Manufacturers’ Association states that 19% to 43% of the MSMEs in India may disappear if the crisis persists for four or eight weeks. It is inevitable that a high number of small and micro enterprises will go out of business in the near future. There is also the prospect of massive job cuts by various large enterprises/sectors in the economy, thereby increasing the number of unemployed in the overall eco-system. The difference would be the fact that these unemployed would have had entrepreneurial as well as job experience, and the focus of entrepreneurial thinking in the ecosystem will move from opportunity-based to existential. And the numbers taking the entrepreneurial plunge (varying from wage workers to self-employed/freelancers according to their economic segment) could potentially increase significantly in the next two years.
Resilience of the small
The relevance of this thought comes from the fact that even though the vulnerability of the ‘small’ is always high, the ‘resilience of the small’ is also significantly higher. The concept of ‘resilience of the small’ is used to explain why the small enterprises are able to quickly understand the change in business environment and business needs, cope and adapt to the changes happening and rebuild according to the relevant changes.
The resilience of small entrepreneurs in countries like India and specifically of high conflict zones is something that needs to be studied with much greater detail to understand how small entrepreneurs have been able to deal with instability and adap .
Learnings from North East
The North East Region of India has been economically vulnerable for decades. Political disturbances have affected the economics of the state and the region on numerous occasions since 1989. The state of Manipur has seen months of economic blockade (November 2016 – March 2017). Similar cases of economic blockade or uncertainty have been seen in Nagaland, Tripura and other North Eastern states as well.
Talking to some of the small/micro entrepreneurs who could wade through the difficult times, I could glean some fundamental learnings that could be useful to develop resilience in today’s context.
Ability to shift to fulfilling the demand: Small and micro enterprises quickly moved to products/services which were in high demand during the crisis. This not only enabled the enterprise to meet the urgent requirements of the market but also helped sustain economically through the period of crisis.
Sell off current inventory: There is all-weather wisdom in not maintaining high inventory as a small/micro enterprise. In a crisis, it is doubly important to sell off existing inventory, even if the margins are low. Cash flow is the lifeblood of a small enterprise and this ensures the business has enough to bounce back or pivot.
Getting together: Small and micro entrepreneurs in Manipur have survived by being together, the Ima Keithel (Mothers Market) is an all-women market and has been able to do business at the worst of times as they have been the financial as well as social support to each other. Entrepreneurs should explore all possible avenues for collaboration that will enable them to stay afloat together.
Think local: In periods of crisis, most of the enterprises have been able to survive by serving the local economy. Enterprises which used to transact with other states understood very quickly that in the blockade movement of goods gets affected very quickly and hence maintaining or shifting to the local market is a quick insurance.
Market never dies, enterprise never dies
One of the biggest realities however is the fact that markets never die, they move their priorities from one product/service to another. But isn’t change in market preferences a harsh reality even in normal times? In the aftermath of the COVID-19 outbreak, the market and consumer behavior might make significant shifts due to a sudden external shock (demand pull change) instead of the new product push from the market. And the entrepreneurs who can either predict this change or direct the change would be in a better position to succeed.
This tectonic shift would also mean that a whole new set of thinkers, innovators, entrepreneurs and changemakers would be produced by the ecosystem which augurs well for the entrepreneurial climate across the globe. The small and micro sector is where we shall find the next generation of economy boosters.
The shift in market preferences or consumer behavior might (emphasizing ‘might’) significantly shift towards health and wellness, immunity-building food (not talking of chemical formulations but organic/safe food), lifestyle products (‘back to basics’ lifestyle). The concept of ‘less is more’ might find favour for a while. Similarly, there may be intriguing shifts in investments into new age agriculture and manufacturing linked to changing consumer patterns mentioned above. This will see blooming of the new shoots of innovation and enterprise in a very short period. Social media might peak with social distancing.
We may also see a change in the communication and positioning of products/services to match changing narratives and preferences.But through all this, the market ecosystem will bounce back and it shall do so with the help of entrepreneurs (as always). Some of whom will be quick to adapt and some will be innovators with fresh ideas. Either way, the system will give us the next generation of change makers and success stories.
Author Profile - Anirban Gupta
Anirban Gupta is a passionate social entrepreneur dedicated to entrepreneurship development in India for the past 15 years and an active thought leader in the entrepreneurship space. He is the co-founder of Dhriiti (www.dhriiti.com), a pioneering organisation working to promote entrepreneurship in the country and Tamul Plates (www.tamul.co.in), a social enterprise producing and marketing bio-degradable disposable dinnerware, through community-owned micro-enterprises spread across North East India.
Dhriiti is our implementing partner in the North Eastern Region: Set up in 2004, Dhriiti works with women, youth and communities in economic crisis and partners with Government, corporate bodies, multilateral agencies and civil society organizations to build a favourable ecosystem for entrepreneurship across India.
Disclaimer: Views expressed solely belong to the author