Locking the entire global population in four wall houses, the Novel Corona Virus pandemic seem to have the potential to beat down the ‘Great Depression’ of 1929. With every 4th working person in the US filing for unemployment benefits, we can understand the economic depression this Pandemic is pushing us to. And as we are moving towards unlock phases, the major concern of every country in the globe is to cope up with the losses happened and open up doors for a better future while the fight with the virus is still going on.
As global travel and trade is a matter of concern until we have a vaccine of Covid-19 injected in our body, Indian government is observed encouraging local entrepreneurship to maintain local demands and supplies with campaigns like ‘Aatmanirbhar’ (self-dependent). Global trade being on pause for months, it is high time that local entrepreneurs can meet customer demands efficiently and give competition to big MNCs. So, what can be the role of entrepreneurship in stabilizing the economy in present scenario?
We have observed, in the past, the amount of economic influence Ford as a company had when it was founded by Henry Ford back in the initial period of 20th century. From the working hour policies it introduced to the employee benefits it provided, Ford had a big impact in job creation. Ford turned it into a big company which allowed it to make such moves. But can we expect rise of such big companies during this time of recession to pull us out of the recession? May be not. Instead we can have mass small scale entrepreneurs who can focus on local problems more efficiently. Let it be a local online grocery store that can help you avoid mass gatherings in super markets or a local e-commerce that can deliver from your favourite coloured top to the iPhone SE. The Amazons and the Flipkarts are always there for you to explore but local options make it easier to prevent infection as the virus is still around. So local entrepreneurship means local jobs and it can result in filling the potholes of the recession.
And when we discuss about local entrepreneurship, how can we avoid local manufacturing and farming? Local manufacturing does not mean in town manufacturing of the Macbook, but stands for keeping up with needs and requirements with local resources. A good example of this would be local people of Assam manufacturing ‘facemasks’ from ‘Gamosa’ instead of depending on outside supplies for raw material or end product (face masks).
Local resource + local demand + local supply + local customers = successful support local campaign
And if you have some relatively free space in your backyard, congratulations as you can have bigger contribution to ‘support local’. Because, there is high possibility that some entrepreneur in your township will set up a local supply chain of vegetables to help you keep up with food supplies. So you can help such entrepreneurs with some backyard farming or a kitchen-garden and yourself as well with some cash flow and a hobby during this lockdown. As economic development is highly related to active supply chain and cash flow, the smoother and easier the supply chain is higher the chances of economic uplift.
And as big corporate are observed cutting jobs to avoid economic losses during the pandemic, entrepreneurship is the need of the hour to solve socio-economic issues we are facing right now. Entrepreneurs can be the support system of governments reducing the load of unemployment, poverty and other correlated issues. World governments right now are bound to spend majority of their fund reserve in fighting against the virus which is making the governments poorer day by day as there is very limited sources of revenue generation and the expenditures are only increasing. Starting from unemployment relief funds to PPE kits, ventilator and other necessary medical equipment, the government funds are required everywhere. So, a wave of new age entrepreneurs or existing entrepreneurs expanding their product and service base, just as Swiggy (food delivery app/service) turned into a grocery supply chain, will not only solve economic problems but will also add to the government fund reserve to fight the virus. And by solving the problem of unemployment, entrepreneurs will help the economy in different ways.
And history has enough evidence that support from entrepreneurs help governments to come up with plans and policies which enhance economic development via mutual benefits for both the parties. Let it be loosening up business laws or governments helping in setting up manufacturing units or tax benefits to boost up productivity. World governments have also understood that start-ups are the new age socio-economic problem solver. We can take, for example, Samsung and LG, the economic back bones of South Korea or Alibaba, the e-commerce booster for China. Start-ups are solution to cash flow, money creation, unemployment, poverty, infrastructure and many other problems. Though a government job can solve the unemployment problem it again doesn’t bring positive economic value in return.
And as we do not know when and how effectively international supply chain will reopen, the entrepreneurs also have a positive opportunity to meet customer demands locally. Or if there is a demand for a digital product or service, congratulations to you as an entrepreneur, you can provide your internet service throughout the globe from your backyard office.
Stay safe, stay healthy.
See you in my next blog.