November 20, 2019
Incubating Entrepreneurship in Middle India: How Do We Move Microenterprises to the Next Level?

Jagriti Yatra (JY), an ANDE member initiative in India, is an annual train journey of discovery for hundreds of enterprising young people. For two weeks every December, young and aspiring entrepreneurs get on a train in Mumbai and embark on an 8000 km journey. Through the journey, they meet, interact with, and get inspired by highly reputed senior social entrepreneurs and the growing band of small and growing businesses (SGBs) that are creating an impact across the country.

Credit: Anirudh, Unsplash

Among the stops along the 2017 JY journey was Barefoot College in Tilonia, Rajasthan. One of the “yatris,” or travelers participating in the journey, asked the celebrated social entrepreneur, Bunker Roy, what he saw as concerns for the future of the work he has been engaged in for decades in the village and among the far-flung communities. Bunker Roy responded saying that what worries him most is the fact that learning was reaching a plateau, among the local people. It seemed as if there was no motivation to keep up with the times, to continually innovate and create anew. This was astonishing, coming from someone who has spent a lifetime building up local knowledge and skills for mainstreaming in geographies around the world, in addition to involving local communities to do so.

Bunker Roy’s point was interesting, especially as we debate the disparity, divides and dilemmas that confront the youth of today. What and how can the more urbane youth — born, bred and educated in the metros — learn about resilience from people in rural India while also helping them to accept change as a reality of life — especially as technology advances at a rapid pace and is applied at scale?

Middle India is home to a large number of subsistence enterprises — driven by necessity and the inability of youth there to find dignified jobs. Those who manage to get the education to qualify for good jobs, move to urban areas and metros where the glitz is too attractive to contemplate returning home. And those not from middle India have little interest in investing time and money there.

These realities have been widely acknowledged. It is also known that that job creation will largely happen through small but growth-oriented enterprises and hence will have to be purpose-driven. Prof. R. Vaidyanathan of IIM Bangalore estimates that the non-corporate sector (consisting of self-employed and partnership and proprietorship firms) already contributes 45% of the national income and about a similar percentage of jobs. Most major reports from government and private bodies agree that that employment for the 10–15 million youth entering the labor force every year will be generated by SGBs created and driven largely by entrepreneurs in our small towns and districts. How are the dilemmas and seeming contradictions of the variously motivated, educated and capable youth in the many parts of India to be overcome? Are there inclusive small enterprise models to help connect youth in upper and middle India to learn and build together for all of India?

The JY 10-year impact assessment reveals that the participants, barring a few, are traditional in their career thinking when they begin the journey but are willing to explore alternatives as they reach the end. However, while the change towards being an entrepreneur occurs, how upper and middle India yatris learn, experience, connect and create to make a difference, is an emerging experiment for Jagriti. This involves non-conventional start-up models as well as support initiatives by the alumni yatris, particularly for middle India, that enables learning and growth for all involved.

Rural Roots is an enterprise in Deoria, a district in Uttar Pradesh, co-founded by two yatris. These individuals in their late-20s, based in London and Delhi, were initially both working with reputed international consulting firms. Although neither founder belonged to Deoria, upon visiting a rural enterprise incubator in the region, there arose an interest to begin an entrepreneurial venture that would also uplift the skills of the local communities. Pickle was chosen as the product to develop for upgraded markets as it had multiple advantages; it enjoyed market potential, was a familiar activity among rural women and skill upgrade was possible through Jagriti’s two-decade old technical training institute in Deoria. These factors enabled a faster traction on the supplier side. However, the early challenges were on the promoter/entrepreneur side; remotely located first timers, their unfamiliarity with the area and product, the constraints in finding an entrepreneur in a small town with the requisite product knowledge and growth interest who could build the business, and the inability to attract skilled professionals to be based in a place like Deoria.

Finally, Rural Roots settled for devising robust protocols for collaboration between an international founder, one based in Delhi and Deoria local hires for enterprise promotion. The protocols included regular remote communication and training and support from the Jagriti incubator and national network (including Jagriti board members) for hiring, financial linkages and mentorship. This helped Rural Roots to persist and even consolidate itself in two years.

This is an evolving process, and perhaps slower than most start-ups whose founders can commit to being based in the location, but the inherent complexity of the “remote entrepreneurship model” for building enterprise in middle India is prompting Rural Roots to find creative ways to make it work. Process innovations to grow businesses in places like Deoria have to be continuous to sustain the model even when the original founders move on, as witnessed with Rural Roots in 2019. The successors of Rural Roots are established Tier 1* entrepreneurs who want to expand and diversify their existing supply chain in Tier 2 and 3 areas. To achieve this, they are involving existing Deoria Yatris in the business and helping develop new local youth as entrepreneurs who will undertake the Yatra for further exposure.

The Yatra has enabled the reverse process as well — where yatris from smaller towns are looking to their counterparts from metropolitan cities to navigate new markets. Mojesh Kumar, an entrepreneur from a small town runs 3 businesses along with another yatri from the same city. Coming on the Yatra on two consecutive years got him enough contacts that eventually helped in structuring his company within very short span of time.

At the other end of spectrum, successful entrepreneurs from upper India (such as Mudit Yadav of Mysuccesscoach), have come on the JY in subsequent years to offer coaching and mentorship to yatris from middle India (on and off the train) as they embark on their entrepreneurial journeys.

Pooja Shahi is a local artisan from Deoria and has been on the JY for 3 years as a volunteer for exposure and contacts to build up her craft enterprise, Deoria Designs. She gets help with a variety of her enterprise needs like government paperwork and raw material purchasing from Delhi-based yatris. Pooja says that since she has built up a reliable support group in Tier 1 cities for her start-up needs and received financial support from a Kanpur-based incubator, she has enough support for consolidation and can postpone adding partners.

These are just a few examples. The gradual institutionalization of middle India-upper India collaboration for microenterprises that the 5000 yatri-strong network has made possible organically will consolidate some of the models and produce its variants for replication across the two Indias.

When President Kovind exhorted the yatris in an interaction at Rashtrapathi Bhavan, to commit to creating not just enterprises but also five other entrepreneur leaders towards fulfilling the requirements of an enterprising nation, he was referring to the national imperative of innovation and job creation that needs entrepreneurs to take up the task. What India needs to fulfill this imperative is the launch of another movement for entrepreneurship where upper and middle India can connect for sustainable impact on incomes and job creation.

*Tier 1,2 & 3 are ways of classifying Indian cities based on their population. See more here.