Financial Daily from THE HINDU group of publications
Tuesday, Mar 16, 2004
Industry & Economy
`Entrepreneurship education a must for SMEs'
G K Nair
Kochi , March 15
ENTREPRENEURSHIP education is an essential component needed for the small and medium enterprises (SMEs) in Kerala to withstand the challenges of globalisation.
Such an education is necessary as it would enable the entrepreneurs to ask the right questions at the right time, and that of the Government to identify the needs of the entrepreneurs and to respond to it, according to Dr P M Mathew, Director, Institute of Small Enterprises Development (ISED), here. Mechanisms, which can help enterprise development in Kerala will emerge out of such an objective situation.
A high-level entrepreneurship will create demand for business development services of a high quality. If the demand develops, a market for such services will develop. If such a market develops, several other things will follow. But the demand should come from the entrepreneurs themselves, neither from the Government nor from the business associations.
"Nobody can help the SMEs to withstand the challenges of globalisation, unless the entrepreneurs themselves perceive a need, and master the methodology of translating such need into clearly defined objectives and activities," Dr Mathew who had conducted a study recently said.
Kerala has no dearth of studies, which criticise Government policy. Similarly, the Government has no dearth of development strategies and programmes, which is part of its armoury, he said.
Most entrepreneurs of Kerala find marketing of their products as a "problem". They consider it a problem of the negative kind, because they have been groomed under a supply-side culture. The milieu so created has been so strong, that he has forgotten the elementary lessons of running a business. Every "assistance" for marketing involves a transaction cost. He has also been told of wonderful concepts like "eliminating the middleman", but the very concept of "marketing" involves the interaction of intermediaries.
The predominant entrepreneurial perception of "innovation" is one of advanced technology. The picture of a new technology assumes, something "foreign and imported". Such a perception has been cultivated by minds, which are not straightforward. It transgresses Government departments, membership "organisations of entrepreneurs", political parties, which swallow foreign ideas indiscriminately, and by the educational system, which is tuned to their interests.
The term "sub-contracting" as it has often been used in official circles, means the presence of parent companies and ancillaries. Implicit in this is a paternalistic relationship: the relationship between a more powerful one, and of a subordinate.
The subject matter of the term "sub-contracting" need not require large and small firms. It essentially means only a relationship between firms, by which one firm has something to give in the form of services, and the other one has a demand for such services. The concept of paternalistic relationship implies that the smaller units should always be at the receiving end: a scientific articulation of exploiting the smaller units by the larger ones.
It is entrepreneurial illiteracy that prompts SMEs to consume many such erroneous ideas as above, he said. They are often ignorant of many basics. But the ignorant are often exploited by the powerful, which are often not better informed. This vicious circle of ignorance is something, which needs to be fought out through entrepreneurship education, he pointed out.
Today, it is not simply the size of capital investment and employment that determines the economic power of a firm. On the other hand, it is the market access, which influences their prospects. Market access is influenced by the firm's base of knowledge as also, its economic and social networks, which is called "social capital".
Viewed from the above angle, it is necessary to look at SMEs from their varied potential. Tapping such potential requires, concrete action from various angles: entrepreneurship education; HRD interventions; infrastructural support services; and more importantly, business development services.
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