Accelerating Green and Inclusive
Entrepreneurship Led Development

After much eager anticipation, many world leaders and climate experts congregated for the COP26 at Glasgow. And what could be a more critical time to discuss the global agenda affecting people across the world? The recent IPCC Climate Report (2021) sounded ‘Code Red’ for humanity, and called for urgent actions to mitigate climate change¹. India’s commitment to achieving net-zero carbon emissions by 2070² presents an opportunity to propel investment and create millions of new green jobs, and the micro, small, and medium enterprise (MSME) sector can play a significant role in this transition.

The MSME sector is crucial in the Indian economy, contributing about 30% to the national GDP, and employing 110 million people³. However, the Covid-19 pandemic exposed the fault lines of the current economic order with unemployment in India estimated to have reached a record 45-year high. The jobs crisis underlines the need to reimagine an economic order that is equitable as well as much more resilient against catastrophes in the future.

A large body of research and practical experience validates the transformative potential of microenterprises⁴, a significant category with a 99.4% share in the MSME sector⁵, to generate multiple economic, social and environmental benefits. In order to unlock these benefits, there is an urgent need for micro and grassroots entrepreneurship to not just expand in scale but also lead a transition from traditional to emerging sectors that provide green growth opportunities and resonate with local aspirations. At present, most of the developmental approaches have top-down control and are linear, and, therefore, a system shift is required for a more equitable, resilient local green economy.

A systems view of Entrepreneur, Enterprise, and Ecosystem and their linkages offers an alternative to the existing systems that are linear and often consider these components in isolation. Such an approach recognises the interplay of factors and processes that form an enabling environment for micro-entrepreneurship and can help overcome persistent barriers faced by microenterprises, particularly those that are specific to their context, size, structure and mode of operation. As depicted in the accompanying diagram, it consists of three key thrust areas; namely, inclusive entrepreneurship, sustainable enterprise and robust entrepreneurial ecosystem.

Entrepreneur (Inclusive): It is essential to understand the needs and contexts of different members of a community. Once realised and nurtured through human-centric processes, the various personas and their aspirations combined with local opportunities will lead to the co-creation of solutions that address challenges within communities. Such processes unleash entrepreneurial abilities and enable under-represented groups to access entrepreneurship opportunities, thereby leading to social inclusion and sustainable economic growth.

Enterprise (Sustainable): Sustainable enterprises balance both social and ecological needs while prioritising economic progress. By leveraging information and services that support the growth of an enterprise, it aims to create linkage with financial institutions, local market aggregators, technology providers and training and capacity building experts to set up and manage operations of an enterprise.

Ecosystem (Robust): Robust entrepreneurial ecosystems influence community members, especially women and youth, as change-makers, leading transformations towards green and inclusive entrepreneurship at the local and regional levels.

It consists of multi-stakeholder coalitions and collaborations with government agencies, technology providers, market aggregators, private companies, financial institutions, academia and accelerating agencies. Such networks institutionalise practices of green and inclusive micro-entrepreneurship and enhance the flow of resources and knowledge towards the adoption of such enterprises at scale. One such example of the Entrepreneur-Enterprise-Ecosystem linkages can be seen through the story of a young entrepreneur in Rajapur village, Madhya Pradesh. Narendra Kushwaha began his electrical enterprise in 2019 after being inspired by his wife who runs a tailoring shop. Self-taught in making energy-efficient LED bulbs, he started assembling bulb parts bought from different vendors and sold them in the local area. He kept learning new skills through the internet on his mobile, keeping up with the industry trends, and diversified his business. During the nationwide lockdown in 2020, he understood the changing needs of the people and invested in a computer to set up a micro-ATM facility, allowing rural customers to access online services locally. While selling LED bulbs, and electrical appliances, he has been able to include other internet services to cater to the needs of the villagers. He understands the essence of micro-entrepreneurship and can communicate with the rural population and other businesses.

For entrepreneurs like Narendra, micro-entrepreneurship continues to be an essential enabler for many to capture new opportunities while overcoming existing challenges. Through a holistic, system-based thinking of Entrepreneur, Enterprise, and Ecosystem, a paradigm shift is possible to move towards Net Zero emissions by 2070, and ‘unleash’ entrepreneurship at scale for a far more green and inclusive economy. ■

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