Indian Ocean Rim Countries Sing “Small is Beautiful”

Small is beautiful may be a hackneyed phrase and many try to obliterate the intrinsic content of the idiom as something not empirically proved since large companies are also successful ones. Many of the large corporations in the world work on technology driven ecosystem, have the advantage of economies of scale, penetrate into global markets much swifter than the micro, small and medium corporations. Then how small can be called as beautiful?
Any narration without facts may end up as hyperbolas. In the case of MSMEs there is a mind boggling data to support that they play a pivotal role in the industrial ecosystem of a country. On an average, 90% of world’s business enterprises belong to the MSME category and contribute substantially to the industrial growth, employment, exports and what have you. This is a substantiated fact world over and not a one off research hypothesis. Also, there is a human dimension to the small enterprises. They are mostly driven by first generation entrepreneurs and also owned and operated by people with limited means. Its low capital requirements, potential to create employment and income locally etc. are well documented.
That way the initiative taken by India to host the Indian Ocean Rim Association’s (IORA) workshop to crystallize the Memorandum of Understanding for SME partnership among the contracting parties are commendable since it would give a definite focus on engagement of these  layer of businesses of the countries endowed with huge coastline and resource base, which are   have yet to be tapped. Why such an arrangement is needed among IORA members?
Foremost is the level of technology and size of the enterprises.  Take for example the size and investment in a SME in a developed world like the US or Germany. Though they are called SMEs, their capital depth, range of operation, employment etc. is bigger than a large corporation in India or Bangladesh.  The platform that is proposed to create will enable hand holding among enterprises of similar nature, strength and potential.
Technology absorption is another high point of the arrangement. For instance, India’s technology, either developed or adapted to suit Indian conditions, is largely relevant to any of the rim countries, be they South Africa, Sri Lanka, Bangladesh or even Australia since the level and scope of penetration of technology are  more or less similar in all the contracting countries.
Three, demographic pyramid of IORA countries necessitate emergence of SMEs in a large way. Most of these countries have large proportion of people in the younger age group. They have to be gainfully employed. Drafting human resources into large corporations seems to be a pipe dream given the huge investments required in terms of technology, land and labor. Easier route could be promotion of capital light small business enterprises, which also have limited use of land mass.
Four, most of the cities, where large corporations are working have faced and still some of them are facing large scale migrations from rural area to cities in search of employment, which put the already saturated civic utilities into severe stress. Creation of small and medium enterprises in rural and semi-urban areas will reverse the migrations that have taken already, if not check it considerably making the cities more livable.  Also, new facilities springing up in rural and semi-urban areas can help creation of capital assets like roads, power, recreation centers etc. to make these areas more livable.
What India can provide to other IOR contracting parties and gain from it? Admittedly, India is one among the countries that can immensely enrich from this arrangement, if it leverages its IT strength. IT edge of India can be shared with these countries profitably in a host of areas. India is using IT in all domains, be it in education, health, judiciary, governance, agriculture and of course Industry. Barring a few countries in the group, most of the countries have to put in place a strong infrastructure to address their backwardness in these segments. A country like Bangladesh, which has similar demographic and socio-economic parameters can gain from tele-medicine models being developed by India in treating patients through virtual medium. Or the university in South Africa or Indonesia can get hooked to schools of higher education in India with arrangements for creating last mile connectivity to be run by small enterprises. Also, Indian IT companies can set up incubators for idealization as a joint venture in IORA countries. There can be many such examples that one can extrapolate.
What is that holding back? We have to call spade a spade. IORA is almost a non starter. Since its formation, it has undergone some structural change as a regional grouping. Its future and growth largely depends on how relevant it can become to the member countries. There are a few developed countries like the US and Germany, which play as observers. But the fact is that how the concept can make or break largely depends on India as a member country and China as a dialogue partner come together to address the larger issues.