What is Entrepreneurship Development Programmes (EDP)?

What is Entrepreneurship Development Programmes (EDP)?

Entrepreneurship Development Programmes (EDPs) are structured training programs designed to help individuals develop the knowledge, skills, and mindset required to start, manage, and grow their own businesses.

Entrepreneurs play a predominant role in accelerating the socio-economic development of a country. They are regarded as nation builders and wealth creators. They are the change agents who initiate economic activities to create wealth. They undertake the business initiative, employ themselves in that business and open up employment avenues for others.

Therefore, the role of entrepreneur is of fundamental importance to a country like India where the twin problems of poverty and unemployment coexist.

During the early sixties, the small scale sector was considered as exclusively an employment generating sector, but gradually this sector began to be recognized as the crucial tool for tapping

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Concept of EDP

Considering the importance of small scale industries in employment creation and economic development, the Government of India envisaged promotional packages to facilitate setting up of new enterprises.

In order to bring about entrepreneurial growth, the policy mailers and financial institutions started thinking in terms of imbibing entrepreneurship culture through training interventions.

Thus, Entrepreneurship Development Programmes (EDPs) Corporation (GIIC) and other agencies who have organized a three-month entrepreneurship development programme in late sixties.

The programme was conducted for a selective group of energetic and potential entrepreneurs who had the willingness and desire to achieve the goal set by them.

The objectives laid down for the above programmes were as follows:

• To set up small scale ventures.
• To manage them effectively.
• To earn adequate profit from these ventures.
• To undertake personal responsibility of the business

It has been found out that ‘n Ach’ factor developed by David McClelland, the renewed behavioural scientist, is the most important quality for entrepreneurial development.

In order to prove that the need for achievement could be induced, he conducted an experiment in collaboration with the erstwhile Small Industries Extension and Training Institute (SIET) of Hyderabad at Kakinada, Andhra Pradesh. Young persons were selected and put through rigorous training for a period of three months to guide them to set new goals.

The achievement motivation has a positive impact upon their task performance. The Kakinada experiment could be treated as an important basis for the present-day EDP inputs on behavioral aspects.

In later stage, Achievement Motivation Training (AMT) has become an integral part of EDP course curriculum. Institutes like SISI, NISIET, SIDO and TCOs came forward conduct EDPs and national level organizations like Entrepreneurship Development Institute (EDI) of India, Ahmadabad and National Institute for Entrepreneurship and Small Business programmes.

According to a study conducted by NIESBUD, at present, as many as 686 odd organizations, including the state level organizations like IEDs/CEDs, are organizing EDPs in the country.

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Features of EDP

Following are the some important features of EDP’s:

• Enhancing the motivation knowledge and skills of the potential entrepreneurs.
  
  
• Assisting them in the development of their own enterprise.
  
  
• Arousing and reforming the entrepreneurial behaviour on their day to day activities.
  
  
• Join an EDP all your problem is solved.
  
  
• EDP’s success in the sole responsibility of trainer motivations.
  
  
• Higher the number better the EDP
  
  
• Need based common facilities centre.

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Objectives of EDPs

The important objectives of Entrepreneurship Development Programmes (EDPs) can be stated as follows:

• Accelerating industrial development by enlarging the supply of entrepreneurs.
  
  
• Developing entrepreneurial qualities and motivating prospective entrepreneurs to achieve the goal.
  
  
• Enhancing the growth of small-and medium-scale enterprise sectors which offer better potential for employment generation and dispersal of the industrial unit.
  
  
• Providing productive self-employment avenues to a large number of educated and low educated young men and women coming out of schools and colleges.
  
  
• Improving performance of small-and medium-scale industries by the supply of carefully selected and trained entrepreneurs and diversifying sources of entrepreneurship.
  
  
• Enterprise development in rural and no-industry areas where local entrepreneurship is not really available and entrepreneurs from nearby towns are not easily lured.

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Indian EDP Model

There is a saying that entrepreneurs are the products of nature and culture. of course, this is very much true in the Indian context. Apart from nature and culture, the role of nurture is very much significant for human resource development.

The myth that entrepreneurs are born and not made has no longer been accepted. Ordinary persons can be turned into successful entrepreneurs though well-designed training programmes conducted by the Entrepreneurship Development institutes. The term nurture here implies the training intervention which is a real endeavor towards human resource development, especially entrepreneurial development.

The Entrepreneurial Development Programmes, therefore, are based upon well-designed and integrated modular packages to but to the needs of the budding entrepreneurs. The training level follows more or less the same principle in organizing Entrepreneurial Development Programmes.

In the present context, EDPs are usually conducted for four to six weeks and the curriculum adopted by the above institutes for imparting training is also apparently uniform.

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Phases of EDPs

The EDPs normally pass through following three important phases:

• Pre-training phase
• Training phase
• Post-training or follow-up phase

Pre-Training Phase

This phase is the preparatory phase for launching the programmes. It includes a number of activities, which are as follows:

• Identification of operationally-promising area, normally a district.
• Selection of a project leader/course coordinator to coordinate the programme.
• Arrangement of infrastructural facilities for the programme.
• Undertaking potential industrial survey/environmental scanning for identification of good business opportunities.

Planning the programmes on various fronts such as:

• Promotional campaigns through either with the help of print or electric media, leaflets, posters, etc.
  
  
• Establishing contacts with business personalities, NGOs and related agencies which can contribute to the program both directly and indirectly.
  
  
• Getting the application forms printed and making them available at different centers along with instructions.
  
  
• Forming selection committee for selecting the trainees.
  
  
• Preparing the budget, obtaining administrative sanctions and organizing other activities which from a part of EDP.
  
  
• Preparing and finalizing the need-based inputs in training syllabus and to tie u with guest faculties to impart training.
  
  
• Contacting the support agencies like DICs, SFCs, SISI, banks, NSIC, District Magistrate, etc. to receive support in implementing the programme.
  
  
• Organizing industrial motivational campaigns to mobilize as much number of applications as possible.

Training Phase

Training potential entrepreneurs are providing them proper guidance for setting up enterprise constitutes the cornerstone of EDP. Most of the Entrepreneurship Development institutes generally conduct training programmes of 4-6 weeks duration on full time basis.

Post-Training Phase

Post-training phase is otherwise known as the phase of follow-up support. During this phase, post-training support services are rendered to the participants who have successfully completed the Entrepreneurship Development Programme (EDP).

This is because of the fact that, very often, the potential entrepreneur after undergoing the training confronts a number of problems while implementing the action plan for grounding the project.

So during this phase, the training organization helps the entrepreneur in sorting out the problems through counseling support. A committee is formed consisting of members generally drafted from the leading bank of the district, State Financial Corporation, training organization and above all, the District Industries Centre to help the entrepreneurs with the following objectives during the follow-up:

• To provide a meaningful direction to the trainees in grounding their enterprise.
  
  
• To review the progress made by the trainees in the implementation of the project.
  
  
• To review the post-training approach.
  
  
• To provide escort services to the trainees by involving financial institutions and promotional agencies

Usually, follow-up action meetings are organized thrice a year after the completion of training and the following methods are generally used for follow-up:

• Postal questionnaire
• Telephonic follow-up
• Personal contact by the trainer
• Group meetings

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Problems of EDPs

The low level of performance is usually attributed to the following problems involved in organizing and conducting EDP trainings:

• Shortage of adequate number of specialized and committed organizations.
  
  
• Insufficient trainer motivators to motivate people for undergoing EDPs and to impart training.
  
  
• Identification and selection of wrong projects.
  
  
• Lack of entrepreneurial and culture.
  
  
• Apathetic attitude of the support agencies like banks and financial institutions to support entrepreneurs.
  
  
• Lack of forward and backward linkages.
  
  
• Selection of wrong person for training.
  
  
• Improper identification of projects.
  
  
• Inadequate counseling support after training.
  
  
• Lack of continuous follow-up action or post-training support services for grounding the project.

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Criteria for Assessment or Evaluation of EDPs

Following criteria are being used by the behavioral scientists to assess the effectiveness of EDPs in the country:

• New enterprise creation
  
  
• Employment generation in quantifiable terms
  
  
• Creation of job opportunities both directly and indirectly
  
  
• Increase in sales and profit
  
  
• Enterprise expansion
  
  
• Enterprise transformation
  
  
• Improvement in quality of product or services
  
  
• Repayment of loans.

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Achievements of EDP

Entrepreneurship plays a very important role in the economic development entrepreneurs as catalytic agent in the process of industrialization and economic growth. Joseph Schumpeter states that the rate of economic progress of a nation depends upon its rate of innovation which in turn depends up on the distribution of entrepreneurial talent in the population.

Technological progress alone cannot lead to economic development unless technological breakthrough are put to economic use by entrepreneurs. It is the entrepreneur who organizes and puts to use capital, labour and technology in the best possible manner for the setting up of his enterprise.

EDP enables entrepreneurs in initiating and sustaining the process of economic development in the following ways:

Creation of Employment Opportunities

Unemployment is one of the most important problems confronting developing and undevelopment countries, EDP’s enable prospective entrepreneurs in the setting up of their own units, thus enabling them to get self employment. With the setting up of more and more units by entrepreneurs, both on small and large scale, numerous job opportunities are created for the others.

Entrepreneur in this way get an opportunity to lead an independent and honorable life and at the same time they enable others in getting employment. Several schemes like Nehru Rozgar Yojna, National Rural Employment Programme (NREP), and Integrated Rural Development Programme (IRDP) etc. have been initiated by the Government of India in the direction.

The thrust of all these schemes is to eliminate poverty and generate gainful employment opportunities for the unemployed. Thus entrepreneur can play an effective role in reducing the problem of unemployment.

Capital Formation

It is not possible to set up an enterprise without without adequate funds. Entrepreneur as an organizer of factors of production employs his own as well as borrowed resources for the setting up of his enterprise. Entrepreneur mobilizes idle saving of the public and put them to productive use. In this way he helps in capital formation which is so essential for the industrial and economic development of a country.

Various development banks like ICICI, IFCI, SFCs, SIDCs take initiative in promoting entrepreneurship through assistance to various agencies involved in EDP and by providing assistance to new entrepreneurs.

Balanced Regional Development

Small scale units can be set up in industrially backward and remote areas with limited financial resources. Successful EDP’s assist in accelerating the pace of industrialization in the backward areas and reduce the concentration of economic power in the hands of a few, Entrepreneurial feel like taking advantage of the various concessions and subsidies offered by the state and central government.

Success storey of entrepreneurs set right example for others to follow and this accelerates the pace of industrialization in the backward areas.

Use of Local Resources

In the absence of any initiative local resources are likely to remain unutilized. Proper use of these resources can result in the progress or development of the area and that too at lower cost. Alert entrepreneurs seize the opportunity and exploit it in the best interests of the area and industry.

Effective EDPs can help in the proper use of local resources by providing guidance, assistance, education and training to the prospective entrepreneurs.

Improvement in Per Capita Income

Entrepreneurs are always on the lookout for opportunities. They explore and exploit the opportunities. Entrepreneurs take lead in organizing various factor of production by putting them into productive use through the setting up of enterprise.

More enterprise will lead to more production, employment and generation of wealth in the form of good and service. It will result in the increase in the overall productivity and per capita income in the country. EDPs play a positive role in the setting of more units thus helps in generation of more employment and income.

Improvement in the Standard of Living

Entrepreneurs by adopting latest innovation help in the production of wide variety of goods and services. By making efficient use of the resource, this starts producing more of better quality and that too at lower costs.

This enable them to ensure easy availability of better quality product at lower prices to the consumer which result in the improvement in the standard of living of the people. EDPs provide the necessary support to entrepreneurs by educating them about latest innovations and market trends.

Economic & Independence

Entrepreneurs enable a country to produce wide variety of goods & services and that too at competitive prices. They develop substitutes of the good being imported and thus prevent over-dependence on foreign countries and at the sometime help in the saving of precious foreign exchange, which is so essential for meeting developmental needs of the economic independence of the economy.

Preventing Industrial Slums

Industrially developed areas are faced and problem of industrial slums, which result in over burdening of civic amenities and adverse impact on the health of people. Dispersal of industries can help in the overcoming of this grave problem.

EDPs can help in preventing spread of industrial slums by providing varies incentives, subsides and infrastructural support to entrepreneurs for setting up their enterprise in industrially backward areas. This will also help in reducing pollution and overtaxing of civic am entities.

Reducing Social Tension

Unemployment amongst the young and educated people is emerging as major cause of social unrest. People are bound to feel frustrated if they fail to get gainful employment after completion of their educated.

EDPs can help in channel sing the talent of this section of society in the right direction by providing proper guidance, training and assistance for setting up their enterprise that result in generation of self employment and prevention of social tension, unrest etc.

Facilitating Overall Development

An entrepreneur acts as a catalytic agent for change which results in chain reaction. With the setting up of an enterprise’s the process of industrialization is set motion. This unit will generate demand for various types of inputs required by it and there will be so many other units which will require the output of this unit.

This leads to overall development of an area due to increase in demand and setting up of more and more units there. Moreover success of one entrepreneur sets the right type of example for others to follow. Entrepreneurs thus create an environment of enthusiasm and convey a sense of purpose. This gives future impetus to the overall development of that area.

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Steps of EDP Process

An entrepreneurial development programme process consists of the following main steps:

Selection of potential entrepreneurs

The first and foremost step in the EDP is the proper and right selection and identification of potential entrepreneurs. It refers to find out individuals who can be converted into entrepreneurs. The utmost care should be taken in identifying the right participants for the EDP’s.

Before selecting the person for training due recognition should be provided to his family background, motivation level, educational qualifications and entrepreneurial skills and competencies. Various modes of selections such as test, group discussions and interviews may be adopted in the selection of potential entrepreneurs.

The two essential components such as identification of entrepreneurial qualities in the potential entrepreneurs and identification of suitable and viable opportunity or project for each identified entrepreneur should be kept in mind in selection of potential entrepreneurs.

Identification of entrepreneurial traits and skills

Every participant must have a minimum level of eligibility for becoming an entrepreneur. The entrepreneurial traits are broadly grouped into two categories:

• Socio-personal traits: The socio-personal traits, qualities and competencies of participants include family background, age, education, size and type of family, working hands, earning members and social participation.
  
  
  • Family background: The knowledge about the family background of a participant helps to understand the occupational awareness for the entrepreneurs. There is certain special type of families traditionally involved in certain types of work. Most people prefer to adopt similar tasks to family business.
    
    
  • Age: Younger people are more successful their higher risk taking ability as compared to older people, creative and innovative thinking.
    
    
  • Educational level: The educational level of participant must be given due consideration. A minimum level of education and types of education play a very significant role in the success of new enterprise.
    
    
  • Size and Type of Family: The size and types of entrepreneur’s family must also be considered. A joint family has generally a greater risk bearing capacity as compared to nuclear family. Working hands: The working hands of family member of potential entrepreneurs also count much.
    
    
  • Social participation: The social participation of potential entrepreneur will determine his social status in the society. Greater social participation improves the ability to influence others and the success of the entrepreneur.
    
    
    Therefore, priority should be given to those persons having experience in business, a functional level of education, young, family and financial support while selecting candidates for EDP.
    
    
• Human resources factors: These are the inherited or acquired skills. The following human resource factors must be considered:
  
  
  • Achievement motivation: It is the basis of entrepreneurship as entrepreneurs with high need achievement succeed better; it involves both personal achievement and social achievement.
    
    
  • Willingness to take risk: Risk taking willingness refers to seek change in business activity. The person perceiving greater amount of risk in the venture has the higher risk taking willingness.
    
    
  • Influencing ability: The entrepreneur would need for adequate motivation to both influence and control the people and environment to achieve the end to successfully.
    
    
  • Personal efficacy: It is the general sense of adequacy in a person. Personal efficacy is an important factor contributing to entrepreneurial behaviour of a person. Personal efficacy can be defined as the tendency in the individual to attribute success or failure to external factors. A person having higher personal efficacy believes in his capacity to control and shape the environment while and individual having low personal efficacy believes that things are not under his control and occur due to fate.
    
    
  • Aspirations: Aspirations are aim of objectives of future. These are relating to future prospects of an individual desire. A person having low level of aspiration is not likely to become an entrepreneur.
    
    Therefore, individual having a minimum level of entrepreneurial qualities like risk taking, innovative, self confidence, initiative, etc. also play dominant role in entrepreneurship.

Identification of enterprise

It is essential to decide a suitable enterprise or project for potential entrepreneur after studying his socio-personal and human resource characteristics. The entrepreneurial project must be suited to the requirements of potential entrepreneurs. A number of factors such as his skill, experience, physical resources, family occupation, etc. should be taken in consideration before selecting an enterprise. After deciding the enterprise, the potential entrepreneur has to study the viability in terms of financial resources, availability of raw materials, marketing profitability, etc.

Contents of training programmes

There are different kinds of participants having different backgrounds and qualities to attend the entrepreneurial development programme.

The following type s of training is provided during the time duration of programme.

• Technical knowledge and skills: The deep knowledge about the technical aspect of the trade should be given to potential entrepreneur who will enable him to learn the process of manufacturing and trading. A number of field trips to industrial units can be arranged to understand the practical aspects of the technology.
  
  
• Achievement motivation training: The main aim of achievement motivation training is to develop the need and desire to achieve, risk taking, initiative and other such personal behavioral qualities. The self awareness and self confidence can be created among the participants through a achievement motivation programme. Motivation training helps the people to expand their business activities and their business venture.
  
  
• Support systems and procedures: The proper training relating to support systems and procedure should be given 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 material, equipment, marketing, etc.
  
  
• 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 marketing position and other methods of dealing in the markets.
  
  
• Managerial skill: A participant requires managerial skills to start the enterprise. It should 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.

Production

After the enterprise is set up, production starts. At this step, the managerial and technological skill acquired in the EDP comes into use. Once the production starts the entrepreneur has to initiate supply of products through suitable marketing channel. The production and marketing are the most crucial stage in the entrepreneurial endeavor. Failure in either would mean a breakdown in EDP.

Monitoring and follow up

Continuous monitoring and follow up is essential for the success of any entrepreneurial development programme. At every stage of EDP, a system of proper monitoring needs to be built in. the defects and problems of EDP can be identified and removed through a proper monitoring system.

Monitoring should provide continuous guidance to ensure better results. The monitoring and follow up should be conducted during each stage of pre-training and post-training of EDP. Pre-training follow up includes evaluation of training infrastructure and training syllabus. The post-training phase is designed to help entrepreneurs to achieve technical, managerial, marketing and financial skills.

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Obstacles in the smooth conduct of EDP’s

Following are the obstacles in the smooth conduct of EDP’s:

No policy at the national level

Through government of India is fully aware about the importance of entrepreneurial development, yet we do not have a national policy on entrepreneurship. It is expected that the government will formulate and enforce a policy aimed at promoting balanced regional development of various areas through promotion of entrepreneurship.

Problems at the pre training phase

Various problems faced in this phase are identification of business opportunities, finding and locating target group, selection of trainee and trainers, etc.

Over estimation of trainees

Under EDP’s, it is assumed that the trainees have aptitude for self employment and training will motivate and enable the trainees in the successful setting up and managing of their enterprises. These agencies thus overestimate the aptitude and capabilities of the educated youth. Thus, on one hand, the EDP’s do not impart sufficient training and on the other hand , financial institutions are not prepared to finance these risky enterprises set up by the not so competent entrepreneurs.

Duration of EDP’s

An attempt is made during the conduct of EDP’s to prepare prospective entrepreneurs thoroughly for the various problems they will be encountering during the setting up and running of their enterprises. Duration of most of these EDP’S varies between 4 to 6 weeks, which is too short period to instill basic managerial skills in the entrepreneurs. Thus, the very objective to develop and strengthen entrepreneurial qualities and motivation is defeated.

Non availability of infrastructural facilities

No prior planning is done for the conduct of EDP’s. EDP’s conducted in rural & backward areas lack infrastructural facilities like proper class room, suitable guest speakers, boarding & lodging, etc.

Improper methodology

The course contents are not standardized and most of the agencies engaged in EDP’s are themselves not fully clear about what they are supposed to do for the attainment of predetermined goals. This puts a question mark on the utility of these programmes.

Mode of selection

There is no uniform procedure adopted by various agencies for the identification of prospective entrepreneurs. Organization conducting EDP’s prefer those persons who have some project ideas of their own and thus this opportunity is not providing to all the interested candidates.

Non availability of competent faculty

Firstly, there is problem of non availability of competent teachers and even when they are available; they are not prepared to take classes in small towns and backward areas. This naturally creates problems for the agencies conducting EDP.

Poor response of financial institution

Entrepreneurs are not able to offer collateral security for the grant of loans. Banks are not prepared to play with the public money and hence they impose various conditions for the grant of loans. Those entrepreneurs who fail to comply with the conditions are not able to get loan and hence their dream of setting up their own enterprises is shattered. Helpful attitude of lending institutions will go a long way in stimulating entrepreneurial climate.

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Suggestions to make of EDP’s Successful

Emphasis on stimulating, supporting and sustaining activities

There should be balance between stimulating, supporting and sustaining activities for making EDP’s successful. Stimulating activities comprise of entrepreneurial education, publicity of entrepreneurial facilities, motivational training and assistance in the identification of viable projects, creating a common platform for entrepreneurs where they can share their problems, experiences and success.

Under supporting activities come various forms of support that can be extended to the potential entrepreneurs for setting up and running of their units. Supporting activities include registration, funds, mobilization, license, tax relief and incentives and management consultancy services. Sustaining activities include expansion, diversification, modernization and quality control.

Model based EDP’s

Entrepreneurial development is an area where there is not ready made solution available. The agency undertaking an EDP is expected to have in- depth study of the demand pattern and availability of the local resources. Any particular model of training which may be very successful in one area proves to be utter failure in another area.

Focus on achievement motivation

In order to create right impact on potential entrepreneurs it is essential to develop achievement motivation. Amongst them through proper training which may be very successful entrepreneur will serve as a role model for others and they will like to follow him.

Designing of viable projects

A viable project is that project which is feasible in terms of availability of resources and market potentials. A viable man has the requisite aptitude and competence to initiate a project. The EDP organizers should prepare the projects keeping in mind local resources, finding, training requirements and assessing the feasibility of the same. The entrepreneurial development agencies should select right people impart right training ad entrust viable projects to them for making EDP’s successful.

Selection of trainees

Trainees should be selected after proper screening. Educated unemployed youth having aptitude for self employment should be preferred having traditional background in the chosen economic activity should be preferred. Effort, money and resource must not be wasted on those trainees, who lack requisite and commitment.

Training of trainers

Success of EDPs depends on the trainers. They should be committed, competent ad qualified. Trainers must be fully acquainted with whatever is latest in their respective fields.

Organising part time programmer

Part time EDPs can definitely suit those people who are working or study somewhere else. These EDPs can be conducted during weekends or in the evening. By providing part time EDPs we can provide opportunity to those who cannot joint any regular EDP.

Duration of EDPs

There are no short cuts for entrepreneurial development. Under EDPs an attempt is made to provide self employment to unemployed through a series of activities involving identification of potential entrepreneurs, providing them with the requisite training, development achievement motivation amongst them and helping them in various was for making them as successful entrepreneurs.

Since it is a lengthy process and as such the duration of EDPs should be increased to six months so that these may remain relevant and serve the purpose for which we are conducting these programmers.