What is Rural Entrepreneurship?
Rural entrepreneurship is a term that relates to the establishment of new business units and industries in rural areas. It involves carrying out entrepreneurship activities in the rural economy which results in the overall development of the nation. Rural entrepreneurship has its root lying in non-urban areas and has a lot of potential for undertaking numerous endeavors in business, industry, agriculture, etc. Generally, industries and business enterprises in rural areas are involved in agriculture and its allied activities. These activities support the livelihood of the majority of the population living in rural areas.
Meaning of Rural Entrepreneurship
Rural entrepreneurship helps countries in achieving equitable advancement and development in all areas. It serves as a key tool for overcoming all gaps in between urban and non-urban areas whether in terms of infrastructure, job opportunities, health, education, etc. Similar growth and development opportunities are provided to the people of village as one available to people of cities.
Need for Rural Entrepreneurship
The reasons for rural entrepreneurship can be well-understood from the points discussed below: –
- High potential of creating employment- Rural entrepreneurship brings in a large number of employment opportunities for people living in rural areas. Industries in rural parts are mostly labor-intensive where many people are engaged in distinct activities both directly and indirectly. The rise in unemployment is one of the basic and most highlighted problems of every nation in today’s era. Rural entrepreneurship can be very effective in tackling this problem in a positive way by bringing in more job opportunities for people.
- Brings down income disparity- Rural industries possess a high potential of generating large amounts of income for the rural population. When people living in non-urban areas get equal opportunity for earning income similar to one living in urban areas, the disparities in income earned gets reduced. The establishment of new business setups and industries results in giving better job opportunities with adequate salaries and wages.
- Proper utilization of resources- Rural entrepreneurship helps in the effective utilization of resources available in remote areas. The resources are present in sufficient quantity in rural areas which may remain lie idle if rural entrepreneurship does not exist. When industries will run via rural entrepreneurship programs, then the use of all these resources will enhance productivity thereby favoring the nation in some way. In addition to this, labor available in villages also gets some work in these types of entrepreneurship.
- Reduce migration of villagers- Migration of people from rural areas to urban areas is one of the critical issues being faced by every nation in today’s time. People migrate to cities in search of job opportunities, better life, and various other infrastructural facilities which are missing in rural areas. Rural urbanization works on removing this gap in terms of development among urban and non-urban areas. It helps in creating similar growth and development opportunities for peoples of villages as are available in urban areas. When people have access to job opportunities in their native areas, they would like to remain at their homes instead of migrating to other places.
- Earns foreign exchange- Rural markets serve as an important source of earning foreign revenue for the nation. The products which are manufactured in rural areas are in high demand and exported to several countries all over the world. These products comprise handicrafts, artifacts, handlooms, and various other agricultural products. All transactions are settled in international currencies which leads to an increase in the foreign currency reserve of the country.
- Enhance traditional culture- Rural entrepreneurship not only protects but also promotes the art, creativity, and culture of a particular region on a wider scale. It is seen that people from rural areas have great talent in terms of culture and tradition. Also, all sorts of historic artistic activities originated from rural areas only. Rural entrepreneurship paves the way for the promotion of these activities, thereby enabling villagers to create wonderful handicraft items and earn their bread and butter by selling them.
- Foster economic development- The economic development of remote areas across the nation is increased to a great extent by rural entrepreneurship. It focuses on achieving equitable growth and development in both urban and rural areas. More capital is brought into the rural market by establishing new ventures and industries. All this also results in eliminating the differentiation among areas such as slums, towns, cities, etc.
Problems of Rural Entrepreneurship
There are lots of challenges and hardships which are faced while rolling out entrepreneurship programs in rural areas. They are as listed below: –
- Lack of funds- The absence of an adequate amount of funds is one of the major issues faced by rural entrepreneurs. Finance is termed as the backbone of every business and no business can perform if there is no availability of funds. Entrepreneurs in rural areas face great hardships in securing external funds due to the absence of credit in the market as well as tangible security.
- Poor infrastructure facilities- Entrepreneurs in rural areas suffered a lot due to poor infrastructure facilities. They are unable to attain a better growth rate in absence of basic infrastructure such as transport, communication, and power supply which all are very bad when compared with city facilities. All these are much-needed things in order to run a business in smooth manner.
- Competition- Rural entrepreneurs face tough competition in the market from large-scale organizations and urban enterprises. They lack in terms of product quality, effective branding and proper standardization. All these factors make rural entrepreneurs inefficient in competing with these large-scale organizations.
- Unavailability of skilled labor- Absence of skilled labor in remote areas is another critical issue faced by rural entrepreneurs. It is difficult to find skilled personnel in non-urban areas as most of them are willing to work in urban areas where they get high salaries and access to better amenities.
- Poor quality of products- Rural entrepreneurs lack in better standard tool and equipments for regulating the product quality. This results in production of inferior quality of products. Customers are more quality sensitive in today’s era and may boycott the brand which is not focusing on quality control.
- Exploitation by middlemen- Rural entrepreneurs largely get exploited by middlemen. In order to perform the marketing of products, rural entrepreneurs are heavily dependent upon middlemen who charges a huge profit. Absence of storage facilities and adequate transport services are another marketing issues faced in remote areas.
- Legal formalities- A rural entrepreneur need to fulfill several legal formalities prior to establishing a business unit. These formalities include attaining a business license, pollution certificate and various other forms of clearance. The entrepreneur may find difficulty in completely all these tasks due to the low-level of education.
Types of Rural Entrepreneurship
Various types of rural entrepreneurship are as listed below: –
- Agro based enterprises- Agro-based enterprises are one which is engaged in the processing and selling of agricultural products. These products include fruit juice, sugar, wheat, rice, dairy products, jaggery, oil from oil seeds, and many more.
- Mineral-based industries- Mineral-based industries use mineral ores as primary raw materials for producing their range of products. Iron and steel industry, cement industry, aluminum industry, wall coating powders, etc. are included in mineral-based industries.
- Handicrafts- Handicrafts are artistic items which are made from glass, jute, bamboo, soil, wood etc. In addition to this, antiques, traditional decoration items and toys are also covered here.
- Textile industry- Textile industries include all those industries which are involved in spinning, weaving, tie and dye, and coloring and bleaching of textile.
- Engineering services- Engineering services comprise of tool and equipments that are used in pumps, tractors, pipes and fittings, repairs, etc.
- Forest-based industries- Forest based industries are involved in bamboo products, honey making, beedi industry, supply of wood and wood products, etc.
How to Develop Rural Entrepreneurship
- Identify the opportunities: The first step is to identify the opportunities that exist in the rural area. This could be in the form of natural resources, local skills, and knowledge, or existing markets. Conducting a market analysis to identify the gaps and opportunities can help entrepreneurs in rural areas to better understand the potential demand for their products or services.
- Provide access to finance: Access to finance is a significant barrier for rural entrepreneurs. Providing access to finance through government programs, microfinance institutions, or local banks can help entrepreneurs to start and grow their businesses.
- Build capacity: Building the capacity of rural entrepreneurs is essential to their success. This can be done through training, mentorship, and coaching. Programs that focus on business skills, financial management, and marketing can help entrepreneurs to improve their skills and knowledge.