How small business promotes industrialisation?

. 4 min read
How small business promotes industrialisation?

Industrialisation creates job opportunities, offers education opportunities, facilitates development as well as creativity, and uses capital efficiently. Most of these advantages and more create economic growth which is highly beneficial to the population and the local economy.

Like in history, economic growth offers an environment of limitless potentials and possibilities. We live in the technological age of a planet that has constantly been emerging and advancing. It does help in industrial development by providing an opportunity for future growth prospects. Progress is being driven by industrial growth. Higher customers' needs and demands generate more goods and services.

With increased demand and growth in population, the needs of the consumers also increase, generating a supply of goods and services. This leads to more financial opportunity and rapid innovation.

In India, a small scale business is considered when the overall investment in the fixed assets is less than one crore. The comprehensive services, including production or manufacturing, are done on a micro or small scale with generally a one-time investment.

From a financial and social point of view, small businesses are a vital sector of the economy, as they help with both the economy's per capita income as well as resource utilisation.

It is believed that the small-scale industries have a major role to play in supporting the economy and boosts industrialisation, especially in developing countries like India. Here are a few of the many positive effects of small businesses on any country's overall performance.

• Help in generating employment

Small scale businesses are extremely labour-intensive and thus have a big role to play in generating employment. They look forward to employing people from all backgrounds and aim at having multi-talented people be it, artisans or qualified professionals, reducing unemployment in the country.

• Increases production

With a high labour-intensive workforce, the production in small businesses increases the creation of massive outputs. They contribute to the overall industrial growth and are a major reason for any country's development.

• Promoting higher exports

They not only increase production but also have a great role to play in the increased exports to foreign countries in large numbers. No sophisticated machinery is required by small businesses and hence, importing the machines from abroad is not essential. On the other hand, the demand for products generated by the small-scale sector is strong. It, therefore, reduces the pressure on the balance of payments in the country.

• Tap entrepreneurial talent

Small markets provide entrepreneurship with numerous opportunities. The latent abilities and skills can indeed be channelled into business ideas that can be transformed into practice with little capital investment and almost zero legal requirements to set up a business. In different regions, entrepreneurial potential is targeted, and wealth is often spread across rather than concentrated in the hands of a few people or particular companies. Furthermore, it creates more job givers in society than job seekers.

• Small businesses play a major role as being complements to larger-scale industries

The small-scale business provided raw materials, components as well as spare parts to big industries and assisted in meeting their requirements for setting up large units, serving as ancillaries.

• In terms of capital utilisation

Small businesses also require minimum capital per unit of the assigned output. Due to the shorter gestation time, it gives a fast return on the investment. In small-scale manufacturing, the pay-back period is also relatively very short.

• Small scale industries ensure social advantages

They promote growth in the society, by reducing the concentration of income and capital in a few hands, paving the way towards independent living by encouraging self-governance and democracy in the country. The role of small businesses is to assist the government in growing infrastructure and manufacturing industry, cutting emissions, slums, inequality and many acts of growth.

• Small industries utilise local resource and employment, creating a positive impact on the economy

• They also have a strong effect on the overall economy by enforcing decentralisation

• They offer advantages to the country and promotes opportunities

Small-scale industries provide a tremendous advantage by giving investment opportunities. On the other hand, these businesses generally receive rebates and tax benefits from the government, making it a huge chance of earning massive profits. Small scale industries are typically extremely low in capital investment, and this makes it easy for them to attain financial assistance and funding

• Boost the overall economy and promotes growth

A very well structured and balanced growth in an industry can help boost the overall economy of the country which is provided by industrialisation. Development in manufacturing, as well as production and economic growth, go hand in hand. With the rise in the levels of the industrial output, the overall economy of the country prospers with the growth in the industry. It simultaneously generates more revenue and opens up opportunities for the people and increases employment. Industrial development is correlated with higher incomes. The industrial output provides buts with more capital and more financial services, adding to higher per capita income and thus more labour employment and productivity. It also has a similar effect on the stand of living. Such opportunities can transform an environment and encourage endless amounts of development and growth.


Small businesses are a crucial part of the industry to help the economy grow. It solves most of the concerns of the country by assisting national growth. This would cover up for all the defaults in the industry of unemployment, lack of regional development, inequality of the distribution of income wealth and also lack of utilisation of local and human resources.

These discussed points are the reasons why every country and government promotes and encourages the growth of a small business. With the advent of these emerging businesses, the larger industries also benefit in great numbers. This is also an important aspect noted which promotes the overall industrialisation of any country.

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