Financial Daily from THE HINDU group of publications
Thursday, Dec 15, 2005
Industry & Economy
`Kerala must set up small enterprise commission'
Kochi , Dec. 14
THE Kerala Government, to get its holistic vision of development into action, should set up a small enterprise commission to re-energise the small and micro enterprise sector by developing appropriate mechanisms.
Setting up of such a commission has been necessitated by the slow progress in the small and micro enterprise sector in the State, according to Mr P.M. Mathew, Director of the Institute of Small Enterprises Development (ISED).
Dr Mathew told Business Line that the malady of Kerala's development initiatives in the industrial sector could be expressed under a paradigm of `dependent entrepreneurship', which "implies the hegemony of State-directed programmes and bureaucracy-directed strategies of enterprise development."
This paradigm should undergo a radical change. More of the same thing, such as cluster development, entrepreneurship development programmes, service delivery by the District Industries Centres, Statewide brand image for the products, etc., cannot be the ultimate answers.
In fact, the key to a re-energised small and micro enterprise sector lies in developing appropriate mechanisms, which can translate a holistic vision of development into action. Setting up of a small enterprise commission can be a first step in this direction, he said.
According to him, the conventional approach to economic development (investment-technology- marketing approach) should undergo change in the Kerala context.
"We need to start talking in terms of `local economic development', which takes into account the constraints imposed by globalisation as well."
Job quality and productivity should be emphasised. This requires innovation. In order to ensure these, high-quality business development services should be ensured. Institutions that can deliver such services should come to the limelight of public policy support, he added.
Innovation demands removal of inappropriate old structures and practices. There should be a substitute, he said.
The dominant thinking is that the State should keep itself away and that the market forces will work out for themselves. But even with the prevalence of information and communication technologies, information provided by the market is imperfect. Besides, there is the `invisibility syndrome', which is a major lacuna in the small and micro enterprise sector. This lacuna can be overcome through the introduction of two crucial measures: participative development initiatives and professionalism.
The best of Kudumbasree, and that of a panchayat-level industrial development plan, would be equally ineffective unless there is transparency instilled into the system. Such a proactive mechanism could be attempted through the small enterprise commission for Kerala, he said.
According to him, the small enterprise commission should have the following functions: identification of potential investors; ensuring business development services to all who need it; and ensuring job quality in both traditional industries and modern SSI sector.
Support and encourage professional institutions that can generate ideas, design programmes, and can carry them out, besides establishing a system for regular monitoring of the industrial sector.
"Unless expertise, transparency, and authority come together under a specialised mechanism, reforms in the industrial sector of Kerala is rather impossible," he said.
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