What Can Be Done To Make Rural Entrepreneurship Successful In Asia?

With the growing challenges in the corporate world, most countries around the world are struggling to improve their economy. But can education help a nation in improving its economic performance?

In Asia, more than 50 per cent of the population still resides in villages and rural areas. However, this number is reducing....rapidly. Nowadays, most of the villagers, who are mostly reliant on agriculture, are now moving into the bigger cities in search of better opportunities. As a result many of the Asian mega-cities like Manila and Mumbai have become overcrowded and unsustainable. The rural migration rate is specifically high in China where almost 100 cities have over 1 million people. In contrast, the United Kingdom has only 2 overcrowded cities, Birmingham and London.

So what is the solution?

What can be done to prevent these villagers from leaving the rural areas? The answer is simple. We need to give them a worthwhile reason to stay in their villages. The key question here is how?

One of the most effective solutions is Rural Entrepreneurship, a theme which has gained prominence in the Purpose Economy Asia 100 prepared by Imperative, an US-based career consultancy.

Money comes first

Most business leaders and experts know that you need to money in order to make money. Currently Micro-Finance is the most suitable option which can enable the rural residents to start their own local business ventures. Micro- Finance, primarily Asian in origin, was propagated initially in Bangladesh by Muhammad Yunus, a Nobel Prize winner. Later it became popular in India and other developing economies.

Chetna Sinha, Founder of the co-operative bank Mann Deshi Mahila Bank in Maharashtra, India, says, “If people aren't able to access a micro-finance loan, then they will go to loan sharks”. Sinha, who was titled India's Social Entrepreneur of the Year by the Schwab Foundation recently, confirms that usually unlicensed moneylenders tend to charge high compound interest rates which can range from 20 per cent to 120 per cent.

However, Micro- Finance is not the sole option for these villagers as there are several other innovative loan options available for them. Mann Deshi Mahila Bank also provides specifically designed insurance products, pension services, individualised loans and savings accounts to their rural clients. Meanwhile in Myanmar, a social enterprise named Proximity Designs offers farm finance packages which gives loans for the planting and growing season. Moreover, the payments can also be delayed until the harvest.

Even though there are many rural finance options available now, but the fact remains that the loan amounts are usually very small and the interest rates are rather high for the villagers. Hence it becomes a daunting task for them to create a satisfactory credit score and be eligible for bigger sums.

Is Finance enough for successful Rural Entrepreneurship?

No. Actually it’s far from being enough. The main challenge lies elsewhere. Most of the time aspiring entrepreneurs in rural regions feel handicapped by their lack of relevant business knowledge, skills, entrepreneurial motivation, market awareness, and leadership & communication skills.

The factor which needs the most focus here is developing adequate entrepreneurial motivation and drive. The General Secretary of Sri Lanka's Sarvodaya Shramadana Movement, Vinya Ariyaratne, says, “You need to change the mindset of people. That is, (teaching them) that they can do things on their own without relying on external resources to come to the village, in particular the government”.

Sarvodaya works with about 15,000 villages and helps the residents to start new business ventures by providing training, collective thinking and dialogue and establishing community institutes. Vinya Ariyaratne, who was also chosen for the Schwab Foundation's award, says, “Other organisations see poverty basically as a problem with income and straight away start microfinance and so on. But we believe development needs to encompass … spiritual, moral and cultural development too”.

What can be else done provide necessary training to rural residents on a large scale?

How can the potential entrepreneurs in villages across Asia learn about business without feeling any financial burden? The solution is right in front of us...Online Education. Earning a business diploma study online can help the villagers prepare for Rural Entrepreneurship.

However, it would firstly require the respective governments to greatly enhance the existing infrastructure in the villages, so that they can access the internet. But the good news is many villages across the continent already have internet accessibility. Hence online diploma programmes like MOOCs (Massive Open Online Courses) can help them to learn relevant skills and gain business knowledge that will enable them to start their own business ventures. This would in turn improve the overall economy of the region and add to the national economy as well.

As a nation’s economy largely depends on different industries that have varied effects in the global market, the education level of the citizens, both urban and rural, greatly contributes towards its economic performance. Thus developing countries need to focus on improving the education system, both online and on-campus, so that more entrepreneurs and skilled workers can be created to support various industries. Moreover, the principle that every individual has a right to education has given rise to a movement for improvement of education.

By providing higher education opportunities to the rural population through online learning modes, we can enable them to be self-sufficient and contribute to their local economy. This will certainly prove to be an effective measure in persuading the villagers to remain and prosper in their own villages.

Experts Concerned About Falling Number of Full Time MBA Applicants

It has been observed that executives tend to avoid business degrees when the economy looks good in order to progress their careers. But the same business executives start running in groups towards business schools when the economy looks sluggish as MBA degrees helps them to climb the corporate ladder. However, this observation does not hold true anymore as the recent recession has completely changed the market and the business world.

Rise in MBA Applicants in US & Europe

Experts are now looking forward to the number of MBA applicants in the US this year as economies in North America and Western Europe are getting stronger. Although many leading B-schools in US have not yet reported their application figures, but some of the renowned schools have claimed a noticeable rise in the class of 2016. The UCLA Anderson School of Management has reported an increase in applications by 32%, while at Kenan–Flagler Business School at the University of North Carolina, there has been a rise of 28% in enrolments. Moreover, the US Department of Education has also confirmed that the number of master’s levels students pursuing business degrees was higher than those studying education degrees.

Growing Concerns of Education Experts

However, several admissions directors believe that all this data is unreliable and misleading. Niki da Silva, Admissions Director at Rotman Schoolof Management, University of Toronto, says, “It seems that there is a small number of programmes that are doing well, but the rest of the market is flat”. In fact, most of the reputed business schools are now making extra effort to attract more students. Phil Carter of Imperial College London says, “It’s forced us to proactively look for the right leads”.

Gareth Howells, MBA Programme Director at London Business School believes that it is foolish to think that the MBA market can go back to the 2008 levels. He says, “The protracted nature of the downturn ripped up the rule book on a lot of issues.” Currently, the business education market has become segmented and very complicated. The fact is online and part-time MBA programmes are severely affecting the market share of the traditional full-time programmes. Furthermore, specialised master’s qualifications and professional degrees like the CFA have also posed serious threat to the full-time MBA programmes.

Increasing Demand for One Year MBA

ChristineSneva, the Executive Director of MBA admissions at the Samuel Curtis Johnson Graduate School of Management in Cornell University, points out another aspect. She says that European model of business education is progressively becoming more threatening for the conventional 2 year MBA degree programmes in the US. She says “Europe has been the leader in looking at what flexibility meant to people.”

KateSmith, Head of Admissions, at the Kellogg School of Management, Northwestern University, assures that the school is currently planning to attract more students for it 1 year MBA programme. Admissions Consultant Stacy Blackman also believes that the popularity of 1 year MBA programmes is growing exponentially as nowadays most students apply for both 1 year and 2 year degrees. She says, “People are just seeing that you can accomplish an MBA in one year and it is very effective”.

Emergence of Undergraduate Business Programmes

Another factor directly affecting the number of students applying for full time MBAs is the rise in business management programmes for younger learners. As a result, most recent graduates or undergraduates are gaining knowledge in business. Paul Danos, Dean of the Tuck School of Business, Dartmouth College, says, “In the future we are going to be teaching an array of programmes. Before everybody lived or died with the applications for the MBA, now we’re getting demand at every level”.

Growth in Applications, Not Applicants

However, the real doubt regarding the figures arises from the fact that MBA aspirants now tend to make more applications. According to Admissions Consultant Stacy Blackman, earlier applicants would apply to only 2-3 business schools; but now most candidates apply to 4-5 schools. This results in the rising number of applications (40%), but not the actual number of applicants.

Whether increased applications will finally result in increased number of students can be found out only in September-October, when students get enrolled into the business schools.