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Chapter: Business Science - Enterpreneurship Development - Entrepreneural Environment

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Entrepreneurship Development Programmes (EDP)

Need for EDP: A well known behavioral scientists David McClelland at Harvard University made an interesting investigation into why certain societies displayed greed creative power? Is whether entrepreneurs are born or made?. He found that the 'need for achievement' was the answer to the question.

Entrepreneurship Development Programmes (EDP)

 

Need for EDP:

 

A well known behavioral scientists David McClelland at Harvard University made an  interesting investigation into why certain societies displayed greed creative power? Is whether  entrepreneurs are born or made?. He found that the 'need for achievement' was the answer to the question.

 

'Motive people to work hard leads to achievement'. According to the scholars, Money making is incidental whereas the measurement of achievement is valid.

 

Experimental study (Kakinada)

 

He conducted a 5 year experimental study in one of the prosperous district of Andhra Pradesh in India in collaboration with small industry extension and training institute (SIET). His experiment is popularly called as 'Kakinada Experiment'.

 

Under the experiment, young employees/persons are selected and put through a three month training program and motivated to see fresh goals. One of the signi cant conclusion of the experiment was that the traditional believes did not seem to inhibit. An entrepreneurs and that the suitable training can provide the necessary motivation to the entrepreneurs.

 

The achievement motivation had a positive impact on the performance of entrepreneurs. The Kak-inada experiment could be treated as 'Precursor to the present day EDP' inputs on behavioral aspects.

 

1971 - First massive program of ED embarked in India.

 

At present, 686 All India and state level FI and public sector banks had so far conducted EDPs in hundreds giving training to the candidates in thousands.

 

Example:

 

Junior Achievement - USA

 

Young Enterprises - UK

 

 

Objectives of EDPs:

 

11.    Develop and strengthen their entrepreneurial quality (i.e.,) motivation or need for the achievement.

 

12.    Analyze environmental setup relating to small industry and small business.

 

13.    Select product

 

14.    Formulate project for the product.

 

15.    Understand the process and procedure involved in setting up an small enterprise.

 

16.    Know the sources of help and support available for starting a small scale industry.

 

17.    Acquire the necessary managerial skills required to run a small enterprise.

 

18.    To know the pros and cons in becoming an entrepreneur.

 

19.    Appreciate the needed entrepreneurial disciplines.

 

 

Important objectives:

 

 

1. Let the entrepreneur himself/herself set or reset objectives for his/her business and strive for the realization.

 

2. Prepare him/her to accept the uncertainty involved in running a business.

 

3. Enable him/her to take decision.

 

4. Enable to communicate clearly and e ectively.

 

5. Develop a broad vision about the business.

 

6. Make him subscribe to industrial democracy

 

7. Develop passion for integrity and honesty

 

8. Make him learn compliance with law.

 

 

Course contents and curriculum of EDPs:

 

The course content of an EDP are selected in line with the objectives of the EDPs. The training program is usually to six weeks duration. It consists of the following six inputs:

 

1. General Introduction to Entrepreneurship:

 

 

Participants are exposed to a general knowledge of factors a ecting small scale industries, the role of En-trepreneurs in economic development Entrepreneurial behavior and the facilities available for establishing small scale industries.

 

2. Motivation Training:

 

Induces and increases the needs for achievement among the participants. It is the crucial input of En-trepreneurship training. It injects con dence and positive attitude and behavior among the participants towards business sometimes successful Entrepreneurs are also invited to speak about their experience in setting up and running a business.

 

3. Management skills:

 

Running a business whether large or small requires the managerial skill participants will be imported with basic and essential managerial skills in the functional areas like marketing, nance, HR and production. It helps to run business smoothly.

 

4. Support system and procedure:

 

The participants also needed to be exposed to the support available from di erent institutions and agencies for setting up and running small scale enterprises.

 

5. Fundamentals of project feasibility study:

 

Participants are provided guidelines on the e ective analysis of feasibility or viability of the particular project in view of marketing, organization, technical, nancial and social aspects knowledge is also given how to prepare the projects or feasibility report for certain products.

 

6. Plant Visits:

 

In order to familiarize the participants with real life situation in small business, plant visits are also arranged such trips help the participants know more about an Entrepreneur's behavior, personality, thoughts and aspirations.

 

On the whole, the ultimate objective of Entrepreneurship training program is to make the trainees prepared to start their own enterprise after the completion of the training program.

 

Phases of EDP's

 

An Entrepreneurship development program consists of the following three phases:

ü   Pre-training phase

 

ü   Trainingphase

 

ü   Post-training phase

 

 

1.  Pre - Training Phase:

 

 

The activities and preparations required to launch the training program come together in the phase.

 

 

Selection of Entrepreneurs

 

Arrangement of infrastructure

 

Tie-up of guest faculty for the training purpose.

 

Arrangement for inauguration of the program

 

Selection of necessary tools, techniques to select the suitable Entrepreneurs

 

Formation of selction committee for selecting trainees.

 

Arrangement for publicity media and campaigning for the program.

 

Development of application form.

 

Finalization of training syllabus.

 

Pre-potential survey of opportunities available in the given environmental conditions.

 

2.     Training Phase:

 

 

The main objectives of this phase's to bring desirable change in the behavior of the trainees. In other words, the purpose of training is to develop 'need for achievement' (i.e.,) motivation among the employees/trainees. Accordingly, a trainer should see the following changes in the behavior of the trainees.

 

1. Is he/she attitudinally tuned very much towards his/her proposed project ideas

 

2. Is the trainee motivated to plunge in to Entrepreneurial career and bear risk involved in it.

 

3. Is there any perceptible change in his Entrepreneurial attitude, outlook, skill, role etc.

 

4. How should he/she behave like an Entrepreneur?

 

5. What kind of Entrepreneurial traits the trainee lacks the most.

 

6. Whether the trinee possesses the knowledge of technology, resources and other knowledge related to Entrepreneurship?

 

 

7. Does the trainee possess the required skill in selecting the viable projects, mobilizing the required resources at right time.

 

Having trained the trainees, the trainees need to ask themselves as to how much and how far the trainees have moved in their Entrepreneurial pursuits.

 

3.  Post- Training phase (Follow up):

 

 

The ultimate objective of the Entrepreneurship development program is to prepare the participants to start their enterprises. This phase involvement assessment to judge how far the objectives of the program had been achieved, thisis called Follow up.

 

In nutshell, the purpose behind the EDP follow up is to:

 

 

1. Review the pre-training work.

 

2. Review the process of training program

 

3. Review post training approach.

 

 

Evaluation of EDP:

 

Evaluation of EDP is necessary to see whether the objective of EDP's is ful lled or not. In simple words, there is a need to have a look into how many participants have actually started their own enterprises after completing the training. This calls for evaluation of EDPs.

 

So far 16 evaluation studies have been conducted by various organizations and individual researchers. The most recent and nationwide evaluation study on EDPs is carried out by a ED institute of India Ahmed-abad.

 

It is observed that one out of every four actually started his/her enterprise after undergoing En-trepreneurial training.

 

Blocked - 10%

 

Given up - 29% (idea of launching)

 

430 trainees - cannot be contacted

 

However, the performance of EDPs across the states and across the ED organization have not been uniform. This non-impressive performance lies the need for looking at the problems and

constraints of EDP's.

 

Problem faced by EDP:

 

 

1. Trainer - motivations are not found upto the mark in motivating the trainees to start their own enterprises.

 

2. ED organization lack in commitment and sincerity in conducting the EDPs.

 

3. Non-conductive environment and constraints make the trainer - motivators role ine ective.

 

4. The antithetic attitude of the supporting agencies like banks and nancial institutions serves as stum-bling block to the success of EDPs.

 

5. Selection of wrong trainees also leads to low success role of EDPs.

 

 

'Problems are not with the strategy but with its implementations'.

 

One way of evaluating the EDPsis to assess their e ectiveness in developing 'Need for Achievement' among the Entrepreneurs. This is also called 'the qualitative evaluation' of EDP. The behavioral scientists used the following criteria to assess the e ectiveness of EDPs in motivating the Entrepreneurs.

 

1. Activity level of the respondents

 

2. New enterprise established

 

3. Total investments mode

 

4. Investments in xed asset made

 

5. Number of peoples employed

 

6. Number of jobs created

 

7. Increase in pro t

 

8. Increase in sales

 

9. Quality of product/services improved

 

10. Quicker repayment of loans.

 

The Entrepreneurial behavior is measured on the following four dimensions.

 

 

1. Planning orientation

 

2. Achievement orientation

 

3. Expansion orientation

 

4. Management orientation

 

 

Institutional support to small entrepreneurs

 

SIDO (Small Industries Development Organisation)

 

SIDO is a subordinate o ce of the department of SSI and ARI. It is an apex body and monitoring the policies for formulating, coordinating and monitoring the policies and programmes for promotion and development of small scale industries. The main functions of SIDO are classi ed into (1) Coordination - To evolve national policies, to coordinate between various govts. Coordinate the programmes for the development of industrial estates. (2) Industrial development - To reserve items for production by small scale industries, render required support for the development of ancillary units (3) Extension - To improve technical process, production, selecting appropriate machinery, preparing factory layout and design.

 

NSIC (National Small Industries Corporation Ltd)

 

NSIC an enterprise under the union ministry of industries, was set up in 1955 to promote, aid and foster the growth of small scale industries in the country, to provide machinery on ire-purchase scheme to SSI, to provide equipment leasing facility, to help in export marketing of the provided products of SSI, to participate in bulk purchase programme of the Government, to impart training in various industrial trades, to undertake the construction of industrial estates.

 

SSIB (Small Scale Industries Board)

 

The government of India constituted a SSIB in 1954 to advice on development of small scale industries in the country. SSIB is also known as central small industries board. SSIB is created to facilitate coordination and inter institutional linkages. It is an apex advisory body to render service, advice to the government to all issues pertaining in the development of SSI. 'Industrial minister is the Chairman'.

 

SSIDC (State Small Industries Development Corporations)

 

 

SSIDC were set up in various states under the companies act 1956, as state government undertaking to cater to the primary developmental need of the tine, village industries in the state union territories under this jurisdiction.

 

Important functions are (i) to procure and distribute scarce raw materials (ii) to supply machinery on hirepurcase system (iii) to provide assistance for marketing of the products of SSI. (iv) to construct industrial estates/ sheds, providing allied infrastructure facilities and their maintenance.

 

SISIs (Small Industries Service Institutes)

 

The SISIs are set up to provide consultancy and training to small entrepreneurs both existing and prospective. The main functions are,

 

To serve as interface between central and state government To render technical support services

 

To supply promotional programmes To conduct EDP programmes

 

 

DICs (The District Industries Centres)

 

DICs was started on May 8, 1978 with a view to provide integrated administrative framework at the distinct level for promotion of small scale industries in rural areas.

 

Functions : The DICs role is mainly promotional and development (i) To conduct industrial potential surveys keeping in view the availability of resources in terms of material and human skills, infras-tructure demand for product etc. To prepare techno-economic surveys and identify product lines and then to provide investment advice to entrepreneurs. (ii) To prepare an action to e ectively implement the schemes identi ed. (iii) To guide entrepreneurs in matters relating to selecting the most appropriate machinery and equipment sources of supply and procedure for procuring imported machinery.

 

TCO (Technical Consultancy Organisation)

 

A network of technical consultancy organizations was established by the All India Financial Institutions in the seventies and eighties in collaboration with the state level nancial and development institutions and commercial banks to cater to the consultancy needs of small business and new entrepreneurs.

 

Financial Institutions:

 

Commercial banks

 

IDBI

 

IFCI

 

ICICI

 

LIC

 

UTI

 

SFCs

 

SIDBI

 

EXIM BANK

 

Support Institutions

 

NSIC

 

SIDO

 

SSIB

 

SSIDC

 

SISIs

 

DICS

 

INDUSTRIAL ESTATES

 

 

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