MSMEs and Diverse Entrepreneurship Types in India
Role and Need for MSMEs in the Indian Economy
There is no universally accepted definition of a small-scale industry, as it varies from country to country and over time within the same country, depending on the stage of development, price levels, and government policy. Previously, industries that manufactured goods and provided services on a small or micro scale were granted Small Scale Industries (SSI) registration by the Ministry of Small-Scale Industries.
However, after the government passed the MSMED (Micro, Small and Medium Enterprises) Development Act in 2006, small and micro-scale industries came under the MSMED Act. On May 9, 2007, following an amendment to the Government of India (Allocation of Business) Rules, 1961, the Ministry of Small-Scale Industries and the Ministry of Agro and Rural Industries merged to form the Ministry of Micro, Small and Medium Enterprises. Thus, SSIs are now included under the Ministry of MSME.
According to the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, enterprises are classified into two divisions:
- Manufacturing enterprises: Engaged in the manufacturing or production of goods in any industry.
- Service enterprises: Engaged in providing or rendering services.
Ancillary Industrial Undertakings
The following requirements must be met for an industrial undertaking to be considered an ancillary industrial undertaking, a sub-class of micro, small, and medium enterprises:
An industrial undertaking engaged in the manufacturing or production of parts, components, sub-assemblies, tooling, or (i) intermediates, or (ii) the rendering of services, and that supplies or renders, or proposes to supply or render, not less than 50% of its production or services to one or more other industrial undertakings, and whose investment in fixed assets in plant and machinery, whether held on ownership terms, lease, or hire-purchase, does not exceed ₹10 crores (Rupees ten crore) as of 31-3-2007.
Full Forms:
AS – Additional Secretary, FA – Financial Advisor, DC – Development Commissioner, EA – Economic Advisor, IFW – Integrated Finance Wing, DI – Development Institutes, DBT – Direct Benefit Transfer, DATC – Data Analytics and Technical Co-ordination, JS – Joint Secretary, NSIC – National Small Industries Corporation Limited, NIMSME – National Institute for Micro, Small and Medium Enterprises, ARI – Agro – Rural Industries, KVIC – Khadi and Village Industries Commission, MGIRI – Mahatma Gandhi Institute for Rural Industrialization, SME – Small & Medium Enterprises, AFI – Administration & Financial Institutions, CLCS-TU – Credit Linked Capital Subsidy Scheme for Technology Upgradation
Different Types of Entrepreneurship
Entrepreneurship is a dynamic and diverse field encompassing various types of ventures. Each type caters to specific needs, challenges, and opportunities in different sectors of society. Let’s explore some of the different types of entrepreneurship:
- Social Entrepreneurship: Focuses on creating and implementing innovative solutions to address social and environmental problems. These entrepreneurs aim to make a positive impact on society while generating sustainable revenue. They combine business principles with a mission to drive social change and improve the well-being of communities. Social entrepreneurs may tackle issues such as poverty alleviation, healthcare access, education, environmental sustainability, and more.
- Rural Entrepreneurship: Refers to entrepreneurial activities that take place in rural areas. These entrepreneurs identify and exploit business opportunities specific to rural settings. They may engage in agriculture, agribusiness, rural tourism, renewable energy, or other ventures that contribute to the development and growth of rural economies. Rural entrepreneurship plays a vital role in job creation, reducing rural-urban migration, and improving the overall quality of life in rural communities.
- Women Entrepreneurship: Highlights the role of women in starting and managing businesses. It addresses the unique challenges faced by women entrepreneurs, such as access to capital, networking opportunities, and overcoming gender biases. Women entrepreneurs play a crucial role in driving economic growth, job creation, and promoting gender equality. Women-led ventures can span across various sectors, including technology, fashion, education, healthcare, and more.
- Group Entrepreneurship: Involves a collective of individuals coming together to initiate and operate a business venture. This collaborative approach allows for sharing resources, knowledge, and skills among the group members. Group entrepreneurship can be seen in the form of cooperatives, partnerships, or joint ventures, enabling individuals to pool their strengths and work towards a common goal. This type of entrepreneurship promotes teamwork, risk sharing, and leveraging diverse expertise to achieve business success.
- Strategic Entrepreneurship and Innovation: Focuses on combining strategic thinking with entrepreneurial actions. These entrepreneurs identify and exploit opportunities through innovative strategies that give them a competitive advantage in the market. They align business goals with market trends and technological advancements to drive growth and sustain a competitive position. Strategic entrepreneurs are proactive in seeking opportunities and adapt their business models to changing market dynamics.
- Techno Entrepreneurship: Involves the creation and commercialization of new technologies and innovations. Techno entrepreneurs bridge the gap between technological advancements and market needs by developing innovative products or services. They leverage technology as a core element in their business models and drive advancements in various industries. Techno entrepreneurship plays a crucial role in fostering innovation, economic development, and technological progress.
- Education/Knowledge Entrepreneurship: Focuses on the creation and dissemination of knowledge through educational initiatives or platforms. These entrepreneurs develop innovative educational programs, online platforms, or training centers to enhance learning outcomes and meet the evolving needs of learners. They play a vital role in improving access to quality education, fostering lifelong learning, and addressing gaps in the education system. Education/knowledge entrepreneurs may focus on areas such as online learning, skill development, vocational training, or educational consulting.
Each type of entrepreneurship brings its own set of opportunities, challenges, and social impact. Understanding these different types can help aspiring entrepreneurs identify their areas of interest and develop the necessary skills and knowledge to succeed in their chosen field. Furthermore, these types of entrepreneurship often overlap and can be combined to create innovative and impactful ventures that address complex societal issues. Entrepreneurs have the power to drive positive change and shape a better future for individuals, communities, and the world at large.