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Promoting Value Chain based BDS Providers in India 180309


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Promoting Value Chain based BDS Providers in India 180309

  1. 1. Promoting Value Chain based Business Development Service (BDS) Providers in India Jitesh Panda1 In India, micro Enterprises have enormous potential to provide sustainable income to poor and marginalized families. Hence, there has always been some focus on promoting micro Enterprises. Different Ministries of Government of India like Ministry of Rural Development (MoRD) and Ministry of Micro Small Medium Enterprises (MSME); Bilateral /Multilateral Projects and also Civil Society Organizations have been emphasizing on promotion of micro Enterprises. However, field observations reveal that, nothing much has happened with regards to promotion and strengthening of micro Enterprises. Typically, micro Enterprises are on their own with out any external linkage or support. Micro Enterprises are yet to be positively influenced by growth in Indian economy. Value Chain refers to sequence of activities required to make a product or a service. It includes actors, activities and enterprises. In recent years, there has been increasing emphasis on Value Chain based Development. This is mainly because of growing concern that globalization and growth in National economies is not benefiting the poor and the marginalized communities. There is also realization that, past and ongoing efforts with focus on poverty alleviation or industrialization have not been yielding results. There is need for more and more focus on promoting Inclusive Value Chain Development. Meanwhile, a positive momentum is getting generated, where in Private Sector associated with industries, Civil Society Organizations (CSOs) with concern for the community, Government with thrust on welfare of poor and also community in general are keen on strengthening the value chains in the interest of poor. Inclusive Value Chain approaches can positively influence most of the micro Enterprises. Value Chain Analysis is a prerequisite to strategize micro Enterprise promotion in Value Chain Approach. Recent analysis of some of the Value Chains by Vrutti livelihoods Resource Centre reveals that in most of the Value Chains, there is near absence of formal Business Development Services (BDS) to micro Enterprises. BDS includes information, facilitation and linkage services to enterprises related to production, technology, marketing and credit. Generally, micro entrepreneurs informally access such BDS services from friends, relatives and other micro entrepreneurs. At times, BDS services come as an embedded service (typically with vested interest) from the higher level enterprises (like traders) associated with the value chain. Nevertheless, in the past, there have been efforts by Government to enhance agriculture productivity and by CSOs/micro Finance Institutions (mFIs)/Banks to enhance access to credit services. The need of the hour is to give thrust on providing systematic BDS to micro Enterprises. 1 Vrutti Livelihoods Resource Centre – part of Catalyst Group 1st Cross, 1st Main, Aswath Nagar, RMV 2nd Stage, Bangalore – 560 094, India
  2. 2. Business Development Services to micro Enterprises can be provided to different micro Enterprises in a village. Such services can also be provided to existing/potential micro Enterprises in a value chain. With increasing shift from village based economy to a global village economy, promoting “Value Chain based BDS” can be a core strategy for promotion and strengthening of micro Enterprises. Unlike large enterprises, wherein BDS can be one off event through assignment based support, in case of micro Enterprises, BDS is more of a process, which need to be delivered through hand holding, facilitation and mentoring mode. Hence, in case of promotion of micro Enterprises, BDS provider (the person) assumes more significance than the facilitating organization that may be associated with the individual BDS provider. Nevertheless, the role of facilitating organization to capacitate the BDS provider is also equally important. There is a need to promote Value Chain based BDS Providers in India. Vrutti Livelihoods Resource Centre has just initiated promotion of Value Chain based BDS Providers in Angul district of Orissa. The approach to promoting Value Chain based BDS Providers could be: • Identifying the key Value Chains in the area - through discussion with key informants and review of literature • Field study led preliminary Value Chain Analysis – specific Value Chains • Profiling the micro Enterprises in specific Value Chains • Profiling the informal/formal BDS Providers – both individual and institution based • Consultative meeting with Individual BDS providers - linked to specific value chains • Developing a Plan for “Capacity Building and Linkage” for the BDS providers relating to specific value chains • Implementing the Plan • Tracking progress of BDS services and impact of BDS on Value Chain based micro Enterprises • Sharing experience, learning and best practices relating to promotion of Value Chain base BDS Providers Promoting network of Value Chain based BDS Providers would help in promoting and strengthening micro Enterprises linked to different value chains. Introduction of this “Support Service Link i.e. Value Chain based BDS Provider” would enable all the actors and supporters in transforming the current value chains as “Inclusive Value Chains”. Such initiatives would contribute to “Inclusive Livelihood Promotion” finally leading to Inclusive Development in India.