Informal enterprises should be encouraged
Productivity boosts in such enterprises that have supply linkages with large, organized enterprises increase the latter's real output
There is a school of thought that is concerned about the extremes of capitalism that have given rise to morally reprehensible practices by large enterprises. These range from predatory lending and market manipulation in the financial sector to tech companies’ abuse of personal data and emissions cheating in the automobile industry. They threaten trust and cooperation, which is the foundation of well-being and productivity. An alternative to these extremes is to expand and embrace the broad base provided by small enterprises, which is the biggest segment. This will not only provide a foundation to their well-being, but also increase productivity and jobs. There is another school of thought that small is not beautiful. Small enterprises are not productive, create bad jobs, and are not connected with the rapidly changing forces of urbanization, globalization, and technology. Which of these two schools of thought will better shape India’s future? Are small and large enterprises friends or foes? Do the two sectors nurture or cannibalize each other?
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