Sustainable microenterprises

We had a very interesting debate on microenterprises and the conditions that are necessary for their long term sustenance. There was a consensus that for microenterprises to sustain, they would have to follow one of the following paths:

1. Scale-up using commercial capital – small startups have opportunities in nascent industries. They also often bring innovations and may be able to attract capital that can allow them to scale-up and compete against larger players.

2. Have captive markets – microenterprises can also survive if they have access to captive or assured markets. Dairy cooperative societies are an example. While the societies are themselves small they cater to the demand of larger processing plants. Auto ancillary companies are another example, though they may not entirely classify as microenterprises. Autonomous R&D organizations performing research for larger clients are another example.

While it is possible to have an overlap for SMEs that operate on commercial motives, for community based social businesses that cannot reward (and therefore cannot attract) capital, the latter appears to be the only real possibility.