Micro entrepreneurs have been the backbone of our economy from ancient times. Traders, artisans and small scale producers have been the pillars of the Indian economy even before factories and manufacturers started to put India on the world map. Despite being small scale, the largely family owned enterprises were instrumental for India’s share of 25% of the world GDP in the 17th century.
Thereafter there was a disruption in their growth and a significant decline in the economic output as a result of several factors including industrialisation and colonisation. After Independence, there have been persistent efforts to stimulate entrepreneurship, including the recent thrust on the startups with the active involvement and support of the government, industry and investor community.
AI opens new growth avenues for India’s MSMEs
India has around 6.5 crore MSMEs that have provided employment to over 28 crore people, contributing to 30% of the country’s GDP. Most of them function within the constraints of limited reach and low productivity. With the dawn of the AI era, the potential for growth of micro entrepreneurship has significantly enhanced. AI now presents us with an opportunity to reimagine their businesses as intelligent enterprises and expand the base of micro entrepreneurs by adding into its fold many more new businesses.
AI-native micro entrepreneurs are one-person enterprises with the capabilities of a small firm. They are not just adopting technology in their traditional businesses, they are capable of building businesses around AI and building new business models. Instead of relying on physical infrastructure or focusing only on local markets, they are capable of overcoming the barriers of reach and scale without proportional increase in costs. Having created the foundation for digital public infrastructure with Aadhaar, UPI and ONDC for commerce, the AI layer on top of these layers would enable them to derive intelligence from their transactions and focus on value creation.
AI tools could be accessed via mobile phones, with India having over 750 million smartphone users and the data costs being the lowest across the world. Vernacular AI interfaces are beginning to get deployed which would be of significant advantage for rural entrepreneurs to adopt AI in their business models. Entrepreneurs can create attractive designs and social media content without the need for hiring agencies and thus brand building by micro entrepreneurs is no longer an infeasible proposition.
Personalised recommendations and optimised pricing would enable micro entrepreneurs to widen their reach. Support functions such as finance and accounting being handled by AI tools and customer engagement being supported by chatbots are other examples of how AI-native micro entrepreneurs are equipped to run their businesses efficiently. Thus, whether these micro entrepreneurs are service providers such as tutors or physical fitness trainers or resellers of products or those promoting their products such as food or beauticians, all of them can bridge the expertise or knowledge gap with the help of AI tools for scheduling or marketing or brand promotion.
Bridging access gaps is key to AI-led micro entrepreneurship
In order for AI-native micro entrepreneurship to be scalable and successful, the gender gap in device access should be addressed. This would help in expanding the market reach for entrepreneurs and also in empowering more women for entrepreneurship. We require a low bandwidth compatible vernacular first platform for a wider adoption of AI platforms by rural entrepreneurs. Skilling in the use of AI tools as relevant for their businesses and training on how to remodel their businesses around these AI tools are both very important to make the AI mission relevant for entrepreneurs.
The trust deficit and reliability concerns with AI-led solutions would impact small businesses or the start ups much more than established businesses hence the regulatory framework and the self determined guard rails would be essential ingredients for success. A concerted effort would be necessary in order to create awareness amongst the unemployed youth to become self employed and women to build AI enabled home based ventures.
India has the maximum potential in the entire world to promote AI native micro entrepreneurship due to the talent dividend, scaled market demand and the digital rails already in place. The opportunity exists but creating awareness and getting the buy-in from all concerned, would be the key to success!
The writer is chairperson, GTT Foundation.
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.