The untapped potential of nano - entrepreneurs

There is a section of entrepreneurs that are all around us, but are rarely recognized as ‘entrepreneurs’. We’re talking about nano-entrepreneurs. A nano-entrepreneur, by definition, is a person who runs a business, employing 1-2 people, and dealing with a limited amount of capital and scale. They require little overhead, and thereby, little in the form of initial investment as well. 

This definition can include a wide variety of workers in India: from people who run petty shops, to street vendors, cart salespeople, and more. A lot of these are a part of India’s informal markets, especially in rural India, and a significant portion of these are home-based ventures. Funding for these ventures can come from personal savings, families, or from informal moneylenders, and lack of access to formal lending remains a key problem for majority of these entrepreneurs. 

There are a lot of benefits of setting up a nano-enterprise. Since the initial & continued investment is lower, there’s a lower chance of immediate failure of these enterprises. A study conducted by Global Alliance for Mass Entrepreneurship (GAME) shows that nano-enterprises (with an average of 2 employees) dominate the micro-enterprises sector, in both rural and urban India. Not only that, but the smallest units were also the ones that performed the best in terms of increasing value. 

On a macro-level, nano-entrepreneurship offers employment opportunities to a large section of the population. 65% of India lives in rural areas, with a large section of the population not attaining education beyond secondary level. The pandemic, and the mass exodus of migrant workers from urban centres also showed the need to develop employment opportunities for people in their local geographies. Furthermore, a majority of micro-entrepreneurs are women, who gain economic independence through their ventures. By formally recognizing nano-enterprises, and creating a supportive ecosystem for the same, India can create lakhs of new jobs in localized markets, instead of keeping people reliant on the metro areas. This can play a big role in diversifying the forms and sectors of employment as well. 

Applying the nano-enterprise lens to existing jobs can have overarching benefits as well. Let’s take street-vending as an example. This ubiquitous job is done by an estimated 50 lakh persons. For decades, street vendors had no ‘ease-of-business’, having to deal with constant police pressure, and prevented from conducting business in their chosen locations. There has been a concentrated movement towards empowering street vendors, by providing them training and access to formal credit. However, recognizing these vendors as nano-entrepreneurs will be a paradigm shift, one that reflects the value of their labour. 

Nano-enterprises can benefit a large number of industries: from textile, retail, handicraft, food & beverage, and more. Not only that, nano-enterprises can play a big role in the formal services sector as well: since freelance & contract services could also fall under this category. 

The future is bright for entrepreneurs, but to leverage the full potential of nano-enterprises, two key elements need to be addressed. First, a financial pipeline has to be established for those who want to establish these businesses, or wish to expand the services they offer. Secondly, there’s a need to investigate how digital technology can help deliver the knowledge, finances, and network required for the nano-entrepreneur.