Citing the example of the US post the financial crash of 2008, the Tata Sons chairman said that small-scale entrepreneurs helped that country get back on its feet, creating 60% of net new jobs between 2008-2013.
Stressing on the significance of small and medium sized businesses (SMEs), Tata Sons chairman N Chandrasekaran on Tuesday said that they are as important as large businesses and a new culture of entrepreneurialism is needed among them.
Delivering the 26th Lalit Doshi Memorial Lecture — “India’s opportunities in the decade of 2020s” — Chandrasekaran said, “a crisis of the magnitude of coronavirus cannot be overcome by one industry, one sector, or one government, working in isolation. Just as important as large businesses like Tata, if not more so, are small and medium sized businesses. These businesses are the lifeblood of our community. They are the restaurants, health clinics and salons that fill our neighbourhoods”.
He said that bringing India in line with other developing countries could shift 45 million workers into more productive employment.
Citing the example of the US post the financial crash of 2008, the Tata Sons chairman said that small-scale entrepreneurs helped that country get back on its feet, creating 60% of net new jobs between 2008-2013. “Today SMEs employ 40% of the country’s workforce. Across the developing world, SMEs account for over a third of private sector employment. In India it’s a different story. Only a little more than 10% of employees are in similar enterprises in India. We have millions of micro-enterprises, but these are neither job-creating, nor resilient,” he said.
To make the economy more resilient, Chandrasekaran said that there are big questions of regulation and the bureaucratic overload of the private sector. “There are big questions of investment, to ensure it is flowing into the right sectors,” he pointed out.
On digitisation and the way forward, the Tata Sons chairman said that no doubt that Covid-19 has brought about acceleration in this area but “all will count for little unless digitisation occurs where we need it most: in our public services. I have said it many times before: India’s two great problems are jobs and access. Our education and health systems, though often high in quality, do not extend far enough to meet the demands of our huge population”.
He said that we have made progress but we still have a long way to go. “Three decades ago, India had only 794 institutions offering technical qualifications. Today we have over 10,000. Three decades ago, only 40% of our population could read or write. Now it is closer to 75%. We have come a long way. But we have so much further to go,” Chandrasekaran said.