Entrepreneurial Development

A small Story:

Well known behavioural scientist David McClelland at Harvard University made an interesting investigation into why certain societies displayed great creative powers at particulars periods of their history? What was the cause of these creative bursts of energy?

He found that the need for achievement (nach factor) was the answer to his question. It was need to achieve that motivated people to work hard. According to him, money making was incidental. It was only a measure of achievement, not its motivation.
In order to answer the next question whether this need for achievement could be induced, he conducted a five-year experimental study in one of the prosperous district of Andhra Pradesh in India in collaboration with Small Industries Extension

This experiment is popularly known as Kakinada Experiment. As a part of this experiment, young persons were selected and put through a three month training programme and motivated to seek fresh goals. One of the significant conclusions of the experiment was that the traditional beliefs did not seem to inhibit an entrepreneur and that the suitable training can provide the necessary motivation to the entrepreneurs.

The achievement motivation has positive impact on the performance of entrepreneurs. The Kakinada Experiment could be treated as a precursor to the present day EDP input on behavioural aspects.
In fact, Kakinada Experiment made people realize the need for and importance of the entrepreneurial training, now popularly known as EDP, to induce motivation and competence among the young

Entrepreneurial Development is a key to achieve overall economic development through higher level of industrial activity. Empirical studies have shown that entrepreneurs are made.

Entrepreneurial Development is a process in which persons are injected with motivational drives of achievement and insight to tackle uncertain and risky situations specially in business undertakings.

Why entrepreneurship development?

Entrepreneurs turn opportunities into business ventures. They are important economic development assets in your communities. Entrepreneurs create jobs. According to research supported by the Kauffman Foundation, more than one-third of job growth is due to new businesses. Entrepreneurs give back. They reinvest in the community through charitable giving, community support, leadership and in many other ways.

Creating an Entrepreneurial Environment

There are three components of the environment that community leaders need to address:

Culture Awareness of the importance of entrepreneurs to the local economy, celebration of the value that entrepreneurs bring, openness to entrepreneurs who often march to the beat of a different drummer, acceptance that failure is part of the entrepreneurial process and a willingness to encourage and support entrepreneurs when their first (or even second) venture doesnt pan out Infrastructure Moving beyond the typical notion of infrastructure to include traditional and non-traditional leadership, educational institutions like community colleges and regional universities, cultural and recreational resources, quality schools, social organizations that are diverse and emphasize creativity Entrepreneurial support elements Specific programs and initiatives designed to provide a range of support to entrepreneurs of all types when and how they need it, including service providers like the Chamber and Small Business Development Centers, networking organizations and opportunities, financing programs, business incubation services, mentoring and coaching, and youth entrepreneurship education in and outside the schools.

Entrepreneurship does not emerge and develop of its own. Its emergence and development depends upon an environment in which entrepreneur can learn and discharge his/her assigned responsibility in an efficient manner.

But the real problem is how to develop entrepreneurship.

Entrepreneurship Development Programmes (EDPs) are designed and developed to offer solutions to this problem.

Meaning of EDP

EDP may be defined as a programme designed to help an individual in strengthening his/ her entrepreneurial motive and in acquiring skills and capabilities necessary for playing his/ her entrepreneurial role effectively.

An EDP stresses on entrepreneurial motivation and behaviour.

EDP helps in inculcating entrepreneurial traits into a person, imparting the required knowledge, developing technical, financial, marketing and managerial skills and building the entrepreneurial attitude.

EDP through its continuous process of training and motivation help them to set up their own profitable enterprise and become successful entrepreneurs in their own right. It is not merely a training programme, rather it is a comprehensive programme involving the following process: It is a process which enhances the knowledge, skill and motivation of the potential entrepreneur. It is a process which instills entrepreneurial behaviour in the minds Of entrepreneur in their day-to- day activities, and It is a process through which the potential entrepreneurs can develop and set up their own enterprise

Importance of EDP

Basically the EDPs are meant to train and develop new entrepreneurs who act as catalytic agents in the process of industrialization and economic growth. Entrepreneurs are considered as agents of economic growth. They create wealth, generate employment, provide new goods and services and raise the standard of living. EDP is an effective way to develop entrepreneurs which can help in accelerating the pace of socio-economic development, balanced regional growth, and exploitation of locally available resources

It is the EDP through which the entrepreneurs learn the required knowledge and skill for running the enterprise successfully which ultimately contribute towards economic progress in the following ways:

Creates Employment Opportunities: Acute unemployment has been a chronic problem of most of the underdeveloped and developing nations of the world. EDPs help solving the problem of unemployment by creating adequate employment opportunities in setting up of their own small and big industrial unit where the unemployed are absorbed. EDPs also help the unemployed to opt for se employment by choosing entrepreneurship as a career.

Helps in Achieving Balanced Regional Development: Successful EDPs assist in accelerating the pace of industrialisation in the backward areas and helps in reducing the concentration of economic power in the hands of a individual. Government encourages to set up industries in the backward areas to remove wide gap of income and wealth between the rich and poor.

Prevents Industrial Slums: The towns and cities are highly congested and overcrowding due to the growth of industrial slums which results in overburdening of civic amenities and a lot of problems including adverse impact on the health of the people. EDPs help in solving the above problems by preventing the growth of industrial slums through dispersal of industrial units in different parts of the country including backward and rural areas.

Use of Local Resources: Plenty of locally available resources remain unutilized due to absence of initiative and lack of adequate knowledge by the entrepreneurs. Proper use of these resources will help to starve out a healthy base for rapid industrialisation and sound economic growth. EDPs can help in the proper use of locally available resources by providing proper training, guidance and education to the potential entrepreneurs.

Easing Social Tension: EDPs help in channelizing on right lines the talent and energies of unemployed youth feel frustrated after completing their education without a job or source of livelihood. Unemployment and frustration amongst the young and educated people lead to social unrest Lid tension. EDPs help in diverting the talent of the youth towards self-employment careers by establishing their own enterprises and thus creating employment opportunities for the unemployed. In this way EDPs are able to defuse the social tension and unrest among the youth.

Economic Independence: The entrepreneurs through EDPs are able to achieve economic independence of a country by producing a wide variety of better quality goods and services at competitive prices. They also through export promotion and import substitution able to earn and save urge amount of foreign exchange which is essential for the growth and development of any economy.

Improves the Standard of Living and Per-Capita Income: EDPs provide the necessary support to entrepreneurs by educating them about the test innovation and techniques of production to produce a large variety of quality goods id services at competitive prices. EDPs also help in establishing more enterprises which ad to provide more employment opportunities and help in increasing the earning of the people. It will result in increase in per-capita income and thus helps in the improvement of standard of living of the people.

Helps in the Overall Development of the Nation: Entrepreneur acts as a catalyst which helps in enhancing the various activities involved a business enterprise. In recent years EDP package, have become a vital strategy for harnessing the vast untapped human skills, and put them into industrial development. It results in the emergence of entrepreneurial opportunities in various fields which leads to all-around development in a country.

Objectives

The Industrial Service Institute (ISI) under the Department of Industrial Promotion (DIP) launched Entrepreneurship Development Programmes (EDPs) to give substance to the Governments policies for stimulation of economic growth, dispersing industries to rural areas and promoting the processing of local raw materials. The programme had sought to develop and improve entrepreneurial skills and behavioural adjustment needed to go through the stresses of initial stages. The EDP was considered as a part of the Industrial Policy which was articulated in the Five Year National Economic and Social Development Plans.

The Objectives are: To identify and train potential entrepreneurs. To develop necessary knowledge and skills among the participants.

To help in analysing the various options to select the most appropriate product suiting to the entrepreneur and the market.
To give a clear picture about the process and procedures involved in setting up an small scale Industrial unit or a bigger unit. To develop and strengthen entrepreneurial quality and motivation or need for achievement. To motivate the entrepreneurial instinct.

To impart basic managerial skills and understandings to run the project efficiently and effectively. To analyse the environmental issues to be addressed relating to the proposed project. To develop various business-related skills of marketing, quality management production, distribution and human resource management etc.

To make the potential entrepreneurs know about the possible risks and failures of the project and make them learn how to overcome these problems.

To enable the entrepreneurs to communicate clearly and effectively. To develop team building, technology up-gradation, growth and above all broad vision about the business. To develop a passion for integrity, honesty and industrial discipline. To make him learn the basics of Industrial Laws, Factories Act and workers rights and expectations so that he can easily overcome the legal problems. To formulate the detailed Project Report or projects for the products.

Phases of Entrepreneurship

Development Programmes

An Entrepreneurship Development Programme consists of the following three phases:

1. Initial or Pre-training Phase

2. Training or Development Phase

3. Post-Training or Follow-up Phase

Initial or Pre-training Phase

The activities and preparations required to launch the training programme come under this phase. Here the activities relating to the training programme which covers the identification and selection of potential entrepreneurs and provides initial motivation to entrepreneurs is basically covered.

a. b. c. d.

This phase accordingly includes the following:

Creation of infrastructure for training Publicity campaign for the programme

Preparation of training syllabus

Development of application form

e. f.
g. h. i. j.

Formation of selection committee Designing tools and techniques for selecting the trainees Selection of trainees (potential entrepreneurs) Tie up of guest faculty for the training purpose Arrangement for inauguration of the programme Pre-potential survey of environmental opportunities.

Training or Development Phase

The main objective of this phase is 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 trainees. In this phase the training programme is implemented to develop motivation and skills among the participants. The objective of this phase is to bring desirable changes in the behaviour of the trainees. The trainer has to judge how much, and how far the trainees have moved in their entrepreneurial pursuits.

A trainer should see the following changes in the behaviour of the participants:

a) Is he/ she attitudinally tuned very much towards his/ her proposed project idea?

b) Is there any change in his/her entrepreneurial outlook, role and skill?

c) How should he/she behave like an entrepreneur? d) What kind of entrepreneurial behaviour does the trainee lack?

e) Is he/she skillful in choosing the right project, mobilizing the right resources at the right time?
f) Does he possess the knowledge of technology, resources and other related entrepreneurial knowledge?

Post-training or Followup Phase

The ultimate objective of the EDP is to prepare the participants to start their enterprises. This phase therefore involves assessment to judge how far the objectives of the programme have been achieved. This phase is also called follow-up. Follow-up indicates our past performance drawbacks, if any, in our past work and suggests guidelines for framing future policies to improve our performance. Monitoring and follow-up reveals drawbacks in the earlier phases and suggests guidelines for framing the future policy.

In this phase infrastructural support, counselling and assistance in establishing new enterprise and in developing the existing units can also be reviewed.

In nutshell, the purpose behind the Entrepreneurship Development Programme Follow-up is to: Review the pre-training work

Review the process of training programme; and

Review past training approach Assisting and helping the budding entrepreneurs Counselling those participants who have certain hesitation in starting their own venture

Course content of an EDP

The course content of an EDP are selected in line with the objectives of the EDPs. The contents usually are: General Introduction to Entrepreneurship: First of all, the participants are exposed to a general knowledge of entrepreneurship such as factors affecting small-scale industries, the role of entrepreneur in economic development, entrepreneurial behaviour and the facilities available for establishing small- scale enterprises.

1.

2. Achievement Motivation Training: Development of achievement motive is essential in order to develop human resources. The main aim of achievement motivation training is to develop the need and desire to achieve, risk-taking, initiative and other such personal behavioural qualities, the self- awareness and self-confidence can be created among the participants through an achievement motivation programme which enable them to think positively and realistically. The training under this input aims at inducing and increasing the need for achievement among the participants. It is a crucial input of entrepreneurship training. It ultimately tries to make the participants to start their own business enterprise after the completion of the training programme. Motivation training can also help the participants to expand their business activities and their business venture.

3. Managerial/ Management Skill: Running a business or starting an enterprise requires managerial skills. Since a small or potential entrepreneur cannot employ management experts to manage his/ her business, he/ she needs to be imparted basic and essential managerial skills in the functional area like finance, production, marketing etc. It should also involve all the managerial factors such as planning, organization, coordination, leadership, supervision, control etc. The main aim of managerial training is to enable the participants to run the enterprise successfully.

4. Support Systems and Procedures: The proper training relating to support systems and procedure should be imparted to participants. The participants become able to understand the functioning of various agencies like commercial banks and financial institutions, industrial service corporations and other institutions dealing with supply of raw materials, equipment, marketing etc. This session of the training programme helps the participant to understand the support system, procedures for approaching them, applying and obtaining support from them and availing of the services provided by these agencies.

5. Market Survey: An opportunity to actually conduct market surveys to select the project is provided to participants. This will help them to understand the actual situation of the market.

6. Fundamentals of Project Feasibility Study and Business Plan Development: Under this input, the participants are provided guidelines on the effective analysis of feasibility or viability of the particular project in light of marketing, organization, technical, financial and social aspects. Knowledge is also imparted related to how to prepare the Project or Feasibility Report for certain products. The aim of any EDP should be such that the participants, by end of the programme have a business plan in their hand prepared by themselves and the able guidance of the trainer, mentors and local entrepreneurs.

7. Technical Knowledge and Skills: After the choice of a particular enterprise by a potential entrepreneur, the in-depth knowledge about the technical aspect of the trade should be imparted to him which will enable him to well-conversant with the process of manufacturing and trading in trade. 8. Plant Visits: In order to familiarise the participants with real life situations in small business, plant visits are also arranged. Such trips help the participants to know more about an entrepreneurs behaviour, personality, thoughts and aspirations. A number of field trips to industrial units can be very helpful to understand the economic aspects of the technology.

9. Meet an Entrepreneur: One of the important content of EDP should be Meet an Entrepreneur. The local entrepreneur should be invited to share his/ her experience with the trainees as this will encourage and motivate them to emulate the entrepreneur, who is just like them.

10. Develop Criteria to Select the Target Group that is the Most Entrepreneurial The selection of those who are most likely to succeed as entrepreneurs should be based on clear and transparent criteria.

Potential entrepreneurs display initiative and ambition, have business sense and foresight, and are decisive.
Promising entrepreneurs should be nurtured and helped to serve as role models am mentors for their communities.

Measures to target groups rather than individuals can mitigate income inequality and be effective in empowering disadvantaged groups, especially women, youth and minorities.