SCOPE OF COTTAGE INDUSTRIES IN PAKISTAN

A cottage industry is known as a small-scale decentralized business. These industries are defined by the amount of investment put into them, and their focus is on labor-intensive goods production. Cottage industries play an essential role in developing countries. They are also a vital source of employment, especially in Pakistan.

HISTORY OF COTTAGE INDUSTRIES

In ancient times, rural families were mostly involved in cottage industries. It involved along with the agricultural income to make products at their homes. Merchants used to provide raw materials, and this marketed the finished products. In cities, cottage industries were developed by 1870. Workers were employed at meager wages, and the system lasted till 1920. With the rise in the hand-decorating of items and sewing, highly operational activities were started in cottage industries.

WHAT IS THE DIFFERENCE BETWEEN COTTAGE INDUSTRIES AND SMEs?

Small scale industries are operated by hired labor, usually ranging from 5 to 50 employees. On the other hand, cottage industries are regarded as those organizations in which members or family is involved in the part-time occupation. Cottage industries are mainly restricted to villages, whereas small-scale sectors are located in urban and semi-urban developments. Another significant difference is that cottage industries are developed to meet the locals' requirements, and small scale industries are useful for developing material so that they can contribute to large-scale production.

ARE THERE COTTAGE OR SMALL SCALE INDUSTRIES IN PAKISTAN?

In Pakistan, there are more than 3.3 million small and medium scale industrialists or cottage industry workers. They further employ about 78% of the non-agricultural labor force and makes 25% of manufacturing exports. Talking about their contribution to GDP, it is recorded to be more than 30% as indicated by The News (2020).

The government of Pakistan has also launched the "Digital Pakistan" initiative that ensures digital systems implementation. This is how information asymmetry will be eliminated, and it can produce creative avenues for SMEs to reap the benefits. Some of these benefits include:

• Modern Networking

• Enhanced Processes

• Access to Tools

• Top-Notch Techniques

WHAT CAN YOU GAIN FROM COTTAGE INDUSTRIES?

There are several gains from cottage industries in Pakistan. Small scale industries are labor-intensive, and they manufacture multiple goods with small machines and lesser employees. Initiatives have helped the nations in developing themselves along with the growth of employment ratio. They have their carpenters, cobblers, craftsmen, cotton weavers, potters, etc. Some of the essential types of cottage industries are:

• Textiles

• Embroidery

• Jewelry

• Ceramics

• Cutlery

• Woodwork

• Sports good

• Surgical instruments

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EMERGING OPPORTUNITIES AND SCENARIO OF COTTAGE INDUSTRIES

The commodities which are produced in cottage industries are based on consumable ones throughout the utilization of traditional techniques. These industries help the economy by absorbing the surplus in rural communities. The main risk to which this sector is exposed to is factories of medium or large scale industries. It is labor-intensive and utilizes traditional techniques in the production process.

HURDLES IN SMALL INDUSTRY OR COTTAGE INDUSTRY SETUP!

As a business owner, there are constant hurdles you will face along with your competitors daily. Some of the critical problems include:

You will have no access to startup capital. If you take loans in such situations, your small business will be piled with debts that will result in a lot of stress!

You will have to keep up with the demand. Social media has a vital viral-power to take new businesses and convert them into household names. This will come along with a plan to scale with your growth. A surge in demand through social media's power will never be the downfall of your competitive business.

ROLE OF REGULATORY BODIES IN SMEs

In Pakistan, the private sector plays a dominant role in developing small scale industries. The support of SBP in recent years led to innovation and diversification in activities as it plays a dynamic role in maintaining a suitable environment for industrial setup.

WHAT DOES THE FUTURE HOLD?

In current times, the generation is seeking forecasts for units, employment, capital formulation, and small scale industries production. The country should make honest efforts to set up its small scale industrial sector. This approach can develop a low rate of unemployment and higher growth in the economy.

In conclusion, if you are looking to set up your small scale or cottage industry, contact REDBOX to get to know our interesting new project. Here, you will be provided with diverse opportunities for setting up your drive with maximized growth. We believe in maximizing your profits to a higher level and providing you properties of the utmost quality!