- 1 14 Entrepreneurial Development Programme Notes of Entrepreneurship
14 Entrepreneurial Development Programme Notes of Entrepreneurship
14 Entrepreneurial Development Programme Notes of Entrepreneurship :- Hello friends in this post we are provided the materials of the b.com second part its name is fundamental of Business Entrepreneurship notes and its the first chapter of this subject and in this article you learn many more knowledge of Entrepreneurship like as Meaning and definitions of entrepreneurial development programee, nature or characteristics of entrepreneurial development programme, objectives of entrepreneurial development programmes, role important of entrepreneurial development progreammes, role of government in organising entrepreneurial development programmes, Institute Established by central government, Institutions established at state level, Meaning of district industry centre, characteristics of dics, role and functions of dics, Progress of Dics
14 Entrepreneurial Development Programme
What is meant by Entrepreneurial Development // Programme (EDP)? Discuss the objectives of entrepreneurial development programme.
It is rightly remarked that entrepreneurs are not necessarily born, they can also be developed through education, trainirv and experience. Though entrepreneurial talent exist in every society but socio-economic environment hinders the emergence of entrepreneurial talent. Entrepreneurship requires an environment in which entrepreneur can learn and discharge his assigned responsibility in an efficient manner and change his attitude. Entrepreneurial development seeks to provide constructive direction for those who choose a career path different from traditional
roles. The process of entrepreneurial development focuses on training, education, reorientation and creation of conductive and healthy environment for the growth of enterprise.
MEANING AND DEFINITIONS OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME
Entrepreneurial development is an act of encouraging people for entrepreneurial career and making them capable of exploiting business opportunities. It is not simply a training task. It is the act of motivating and developing skills of potential entrepreneur and helping them in developing their own ventures. Entrepreneurial development is thus an organised and systematic development. It is regarded as a tool of industrialization and a solution to unemployment problem. The objective of entrepreneurial development is to motivate a person for entrepreneurial career and to make him capable of perceiving and exploiting successfully opportunities for enterprises. The trained entrepreneur can guide others on how to start their own enterprise and approach various institutions for finance. In fact, trained entrepreneurs become catalysts of developing industry and economic progress. According to Prof. Pareek and Karenina, “Operationally, entrepreneurship development would mean development Of entrepreneurs and promtion of increased flow of individuals to entrepreneurial ranks.
” Entrepreneurial Development Programme (EDP) may be defined as “a programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skill andcapabilities necessary for playing his entrepreneurial role effectively.”
NATURE OR CHARACTERISTICS OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME
Following are the main characteristics of entrepreneurial development programme : it is an organised and systematic process of enhancing the motivation, knowledge änd skills of the potential entrepreneurs. It is based on the belief that individuals can be developed, their outlook can be changed and their ideas can be converted into action through training. It develops first-generation entrepreneurs who on their own cannot become successful entrepreneurs. It is an endeavour in human resource development. it emphasis on operational rather than academic training. It is regarded as a tool of industrialisation and a solution to unemployment problem. It is catalyst for developing industry and economic programmes. It is not totally based on training. The whole process
extends much beyond ‘training’. Much of it is personal counselling and support.
OBJECTIVES OF ENTREPRENEURIAL DEVELOPMENT
Following are the main objectives of entrepreneurial development programmes :
(1) Promotion of Cottage and Small Scale Industries : The main objective of EDP is to provide, in the rural areas, special programmes designed to stimulate new ventures and encourage expansion of existing activities of small and medium scale industries.
(2) Generation of Employment Opportunities : EDP aims to encourage self-employment among potential entrepreneurs. It generates employment and self-employment opportunities in the processing of indigenous raw materials for local consumption and for exports.
(3) Promotion of First-Generation Businessmen : One of the main objective of EDP is to encourage first generation
entrepreneurs who do not have any business background.
(4) TO Crouto Awareness about Availability of the Resources : It, aims to front,on wnroncss about the available resources„ such rnw material, technology etc. in the prospective ontropronours.
(5) To import Training : The main objective of EDP is to in donut and train potential entrepreneurs. It impart training in mnnngorinl understanding and skills. It also provide post training assistance and monitoring facilities.
(6) To Develop a Broad Vision : One of the objective of EDP is to doyolop n broad vision to see the business as a whole and to integrate his functions with it.
(7) To Remove Doubts of Entrepreneurs and to give solutionlion to their Problems : New entrepreneurs have to face many problems in the establishment and operation of business. To remove doubts of entrepreneurs and to give solution to their problem is one of the main aim of EDP. It helps the entrepreneurs to set or reset the
objectives of their business and work individually and along with his group for their realisation.
(8) To create a successful entrepreneur : One of the main aim of EDP is to create the successful entrepreneurs. It provides constructive direction for those who choose a career path different from traditional roles.
(9) Creation of Conductive and healthy environment for the growth of entrepreneurs : The process of entrepreneurial development focuses on training, education, reorientation and creation of conductive and healthy environment for the growth of enterprises.
ROLE/IMPORTANCE OF ENTREPRENEURIAL DEVELOPMENT PROGRAMMES
EDPs have great role and relevance in increasing the supply Of new entrepreneurs to accelerate the process of industrialization. It is widely accepted that persons interested to become entrepreneur will be greatly helped if appropriate training and development programmes are made available to them. Neeå/lmportance of EDPs can be judged on the basis of following points .
(1) Eliminating Poverty and Unemployment : Most of the under developed countries are confronted with the chronic problem of unemployment. EDPs can help these unemployed people in getting self employment and at the same time generating employment opportunities for others. Various programs initiated by the government like NREP (National Rural Employment Programme, IRDP (Integrated Rural Development Programmel etc. are aimed at tackling unemployment problem.
(2) Balanced Regional Development : Successful EDPs help in accelerating the pace of industrialisation resulting in the reduction of concentiation of economic power. Small scale units can be set up in remote areas with little financial resources and it helps in achieving balanced regional development. EDPs aimed at promoting small scale units are more useful for balanced regional development than medium and large scale units.
(3) Economic Growth : The relevance ofEDPs can be clearly understood by their role in the economic development of developing countries like India. Such programmes create many entrepreneurs who are able to establish small and micro enterprises which require less investment in funds. It increases new investment and bring innovations. All these activities in turn stimulate the economic growth.
(4) Optimum use of Locally Available Resources : The EDPs can help in harnessing locally available resou ces by training and educating the entrepreneurs. Since abundant resources are available locally, proper use ofthese resources will help in creating a healthy base for sound economic growth and rapid industrialisation. EDPB also help in minimising excessive scraps, defective output and wastage in the production process.
(5) Promote Innovations : Entrepreneurial Development Programmes initiate the people for innovations and creativity. EDPs have become a vital strategy for harnessing the vast untapped human skills, to channelise them into accelerating industrialisation.
(6) Defuses Social Tension : Every youth feels frustrated if he does not get employment after completing his education. The surplus young energies can be diverted to self-employment careers to help the country. This may defuse social tension and unrest among youth.
(7) Development of Entrepreneurship Qualities : Thus the EDPs are needed to induce achievement motivation and develop entrepreneurial characteristics or competencies among young persons through training with a view to making them successful future entrepreneurs.
(8) Preventing Industrial Slums : More industrial units are located in highly congested areas and it leads to creation of industrial slums. EDPs help in removal of these slums as entrepreneurs are provided with various schemes, incentives, subsidies and infrastructural facilities to set up their own entreprises in all the places. It will help in controlling industrial slums and also reduces pollution, traffic congestion and over crowding in developed
(9) Fulfilment of Dreams : EDP is necessary to motivate the potential entrepreneurs to convert their dreams into action.
(10) Successful Launching of New Units : EDP develops motivation, competence and skills necessary for successful launching, management and growth of the enterprise.
(11) Development of Rural and Backward Areas : If new enterprises are set up in backward and rural areas of a developing country like India, they are sure to mitigate poverty in, such areas and also to remove lopsided economic development that is, concentration of business enterprises in urban areas only.
ROLE OF GOVERNMENT IN ORGANISING ENTREPRENEURIAL DEVELOPMENT PROGRAMMES
After independence of our country the Government of India decided to promote entrepreneurial activity through various incentives in both industrially backward and rural areas, The thrust of these programmes was to provide, technological, financial, market and morale support to the potential entrepreneurs, who can act as a catalytic agents of change and development. There are vari0US agencies and institutions engaged in entrepreneurial development activity and these are as under.
INSTITUTE ESTABLISHED BY CENTRAL GOVERNMENT
(1) National Institute For Entrepreneurship and Small Business Development (NIESBD) : The Delhi-based National Institute for Entrepreneurship and Small Business Development (NIESBD) was established by the Government of India, as an apex body for coordinating and overseeing the activities of various institutions and agencies engaged in entrepreneurship development particularly in the area of small industry and small business. The Institute aims at creating an environment which is conductive to emergence of entrepreneurship and in developing favourable response from the people •to support potential entrepreneurs. The major activities of the Institute include (i) evolving model syllabi for training various target group, (ii) providing effective training strategies, (iii) methodology, manuals and tools, (iv) facilitating and supporting Centre/State Governments and other agencies in executing programmes of entrepreneurship and small business development, (v) maximizing benefit and accelerating the process of entrepreneurship development, (vi) conducting programmes for motivators, trainers and entrepreneurs which are commonly not undertaken by other agencies and (vii) organizing those activities that help in developing entrepreneurial culture in the society.
(2) Entrepreneurship Development Institute of India It is a national institute set up by Public Financial (EDII) : Institutions and Government of Gujarat, in 1983. The EDII has been engaged in training people for self-employment for the last twenty four years and has done pioneering work in this field. The EDP Department conducts regular training courses with the objective of enabling people to become self employed. The courses are of 3-4 months duration and cater mostly to the needs of village youth and school dropouts. The department imparts not only training but also enables the trainees to become self-employed and endeavour to make their business venture a success. To achieve this PUrpose, the Dept. is engaged in various activities such as establishing contacts with the banks for obtaining loan, helping trainees to draw up a project proposal, and monitoring the programmes of extrainees trainees.
(3) Small Industries Development Organisation (SIDO) : This organisation was established in 1954 by the Central Government. SIDO has designed EDPs to identify persons with entrepreneurial abilities. The training programmes are designed for various groups like educated unemployed, women, weaker sections, rural artisans, physically handicapped, technocrats, entrepreneurs under self-employment scheme, etc. At present SIDO has 16 specialised institutes responsible for training, research and development of product design and processes. It has designed programmes for various types of training. It offers following courses :
(i) Appreciation course in industrial management.
(ii) Specialised courses in such areas as production, marketing, materials, finance and export management.
(iii) Ad hoc incentive courses on subjects like inspection and quality control, work study, salesmanship etc.
(4) National Entrepreneurship Development Board The Department has constituted the National (NEDB) . Entrepreneurship Development Board under the Chairmanship of the Union Minister of State which acts as an apex body for entrepreneurship development. It devises and recommends to the Government schemes for promotion of entrepreneurship for encouraging self-employment in small scale industries and small business. The Board also recommends suitable facilities and incentives for entrepreneurship training.
(5) Indian Investment Centre (IIC) : This organisation is set up by the Government of India to promote joint entures and to conduct EDPs. For this purpose, it has set up an Entrepreneurial Guidance Bureau to guide entrepreneurs in establishment of new ventures. IIC performs the following functions :
(i) identification and selection of potential entrepreneurs; to perform skills
(ii) developing entrepreneurial entrepreneurialjob;
(iii) increasingtheirmanagerial knowledge; and
(iv) helpingthem to start their own projects.
(6) Technical Consultancy Organisations (TCOS) :- Access to high quality consultancy services improves the operational efficiency of entrepreneurs. All India financial institutions have set up 17 technical consultancy organizations to provide industrial consultancy and training to entrepreneurs. These organizations provide a comprehensive package of services to small entrepreneurs. The main functions ofTCOs are as follows :
(i) Identification of industrial potentials;
(ii) Conduct pre-investment studies and prepare project reports and feasibility studies;
(iii) Undertake techno-economic surveys;
(iv) Undertake market research; and
(v) Identify potential entrepreneurs and provide them with technical and managerial assistance.
(7) National Institute for Small Industry Extension and Training (NISIET) : It was established in 1960 under the direction of SIDO to provide extension and training servicestlt imparts training to entrepreneurs, managers, various departments of State Governments, financial institutions and other agencies. It organises about 45 national and 15 international level programmes every year. It is a nodal agency. It is resource and information center for small units. It undertakes research and consultancy for small industry development.
(8) Xavier Institute of Social Services, Ranchi : This institute provides training to rural entrepreneurs. It functions in close cooperation with social organisation. It assists the trainees in drafting project proposals and on obtaining the required finance. It offers a six month programme to tribals for developing the entrepreneurial skills. The programme consists of :
(i) identification and selection of candidates.
(ii) motivation and managerial training.
(iii) training of practical skills.
(iv) market survey and preparation of project report.
INSTITUTIONS ESTABLISHED AT STATE LEVEL
Various institutions have also been established at State level to make the entrepreneurial development programmes more organised and successful. Some of the important institutions are as follows :
(1) Small Industries Service Institute(SISI),
(2) District Industry Centre (DIC),
(3) State Finance Corporation,
(4) State Small Industries Corporation (SSIC),
(5) State Industrieg Corporation (SIC),
(6) Directorate of Industries,
(7) Statelndustries Promotion Corporation.
“District Industry Centre has an important role in entrepreneurship development.”Explain this statement.
In the year 1977, a New Industrial Policy was announced by the Union Government. In this policy, the main thrust was given to the effective promotion ofcottage and small scale industries in the rural and semi-rural areas of the country. To fulfil this objective, The District Industries Centres programme was launched in 1978.
MEANING OF DISTRICT INDUSrRY CENTRE
District Industries Centres are the focal points which provide all services under single roof inclvding infrastructure, technical knowhow, consultancy, marketing, etc. to small entrepreneurs. These centres help in setting up industrial units from the stage of project formulation to the stage of production. These centres serve as an integrated administrative framework at the district level to promote industrial growth. The basic object of DIC is to provide single window service to small, rural and cottage industries. This avoids the overlapping in efforts by various agencies. DICs are based on the concept of “One Window Service.” These centres provide financial and other facilities to small units to develop close links with development blocks and specialised institution in the setting up of industries in rural areas.
Organisational Structure : The organisational structure Of ICs consists of one General Manager, four Functional Managers and three Project Managers to provide technical service in the area relevant t,o needs of district concerned. Management of the DICS is done by the State Governments. The scheme has now been transferred to the States and from the year 1993-94, funds will not be provided by the Central Government to the States for running the 101 CB, l)JBt rjct Indust ries Centres rnaintain close linkages and coots din;gtion Witli various central and State level organisations coo* cerncd with Jjrojnoiaon and developtnent of cottage, rural and small tscole Governrnent have delegated necessary powers to tilChe und coordinat19t1 committees been up to t@’VieW t funct Ivning of these CllA1tAC’r1t1t1STICS OF Single Window Service t I)IC$ provide all the facilities to the under one roof window the district and sub-district level. Earlier an entrepreneur had to contact to several agencies to get the facilities. 2. District Level Agency : The main object of DICs is to promote the small scale and cottage industries widely dispersed in rural areas and small towns. To achieve the goal, DICs are established at district level. These provide all services and facilities for setting-up a small unit at one place.
3. Help in Feasibility Report : DICs help in preparation of a project and feasibility report. These centres provide many suitable schemes for small and cottage industries.
4. Close Link : DICs have close link with development blocks and specialised institutions for providing all services and facilities to entrepreneurs.
5. Labour-lntensive : DICs promote the production of I-arge variety of goods through labour-intensive methods.
6. Employment-Oriented : DICs extend work opportunities to rural and semi-urban entrepreneurs at district level. They help in generating immediate and large scale employment through small units.
7. Utilisation of Local Resources : DICs facilitate an effective mobilisation of available local resources at district level. They supply and disburse valuable raw materials in rural areas all over the country. These promote such small industries which make use of local resources and raw materials.
8. Avoid Overlapping : DICs avoid the overlapping of various schemes, agencies and organisations which in the past were creating hurdles in the development ofrural industries.
ROLE AND FUNCTIONS OF DICs
DICs are playing a vital role in developing small scale industries at district level by performing various functions. Earlier, the small entrepreneurs had to go from one place to another for fulfillment of various requirements to set up a small industry. Now, DICs have made it possible for the entrepreneurs to get everything of his needs at one place. Therefore, entrepreneurs are motivated to undertake and start their own industries. This promotes self-employment and industrial growth in rural areas. The main functions ofDICs are as follows :
1. Coordination : DIC acts as the chief coordinator of niultifunctional agencies in respect of various government departments and other agencies. The prospective small entrepreneurs can get all assistance from this organisation for setting up and running sm all scale units in rural areas.
2. Industrial Potential Surveys : The DICs examine the industrial potentiality of various rural areas at the district level. They conduct surveys keeping in view the availability of resources in terms of material and human skill, infrastructure, demand for product, etc. They also conduct techno-economic surveys to identify product lines and then to provide investment advice to entrepreneurs.
3. Identification of Entrepreneurs : The DICs search out such persons who are willing to set-up new industries and have entrepreneurial skills: They develop new entrepreneurs by conducting entrepreneurial motivation programmes throughout the district.
4. Project Preparation : These centres help in preparing project format and profile. They offer technical advice to new entrepreneurs for the selection of projects.
5. Registration of Units : Once the projects are approved, DICs help the entrepreneurs in getting their small scale units registered. This enables them to obtain assistance from financial institutions.
6. Action Plans : On the basis of potentiality and resources of rural areas in the district, a DIC prepares an action plan for industrial development. This plan is coordinated with District Credit plan and lead banks.
7. Appraisal of Investment Proposals : A DIC evaluates the various investment proposals received from entrepreneurs. It also helps competent entrepreneurs in obtaining credit through various schemes, in preparing application forms and in keeping liaison with banks and financial institutions.
8. Fixed Assets Purchase : A DIC sponsors the loan applications to State Industrial Investment Development Corporation and other banks for the purchase of land and buildings. It also sanctions margin money under Rural Industries project loan scheme payable to financial agencies regarding the purchase of plant and machinery.
9. Providing Clearances : A DIC takes the initiative in providing clearances from connected departments. It also takes follow up measures to get speedy power connection.
10. Arrangement of Finance : DICs also arrange loans for the entrepreneurs under various loan schemes of the Government’ SSIs in rural areas get “interest free sales tax loan”; upto 8% of the total fixed assets from SIDCO. Sanction order is issued from DIC. It also recommends the SSI units to NSIC for registration for Government purchase programme. ‘
11. Infrastructural Facilities : DICs also make necessary arrangements for basic infrastructure for small units. These facilities include like land, electricity connection, water, shed and roads, transport, sales depots, warehouses and cold storages for small entrepreneurs in industrial areas.
12. Arrangement of Machines, Tools and Raw Materials : District Industries centres determine the quantity, quality and prices of machines and tools needed by various small, and cottage industries. They guide and assist entrepreneures in identifying appropriate machinery and equipments, ascertaining their sources and helping in importing the same. DICs also ascertain raw material requirements and their sources and arrange for bulk purchase of raw materials. They also interact and make correspondence with various authorities for the supply of scarce and critical raw materials.
13. Marketing Assistance : DICs collect marketing information and organise marketing outlets. They keep liaison with Government procurement agencies. They also explore the potentiality of ancillarisation and exports. They suggest appropriate marketing strategies to entrepreneurs to face the competition from big industries.
14. Subsidy Schemes : DICs also make arrangements for the financial assistance to village artisans and handicrafts. They assist SSI units and rural artisans to get subsidies like power subsidy, interest subsidy for certain classes, and subsidy under IRDP etc.
15. Contact with R & D Institutions : DICs also help the entrepreneurs to upgrade production technology and to improve quality of products. For this purpose, they maintain link with research and development institutions.
16. Training : A DIC conducts training programmes for rural artisans and entrepreneurs. It assists other units to give training to SSI entrepreneurs. It also serves as the technical arm of DRDA to implement IRD and TRYSEM programmes. It also identifies opportunities and projects for the trainees,
17. Operational Responsibility : DICs have been assigned operational responsibility to implement many special schemes to provide self-employment to educated unemployed youth. This scheme was introduced in 1983-84 for youths of 18 to 25 years of age, SSLC, technocrats and women entrepreneurs are given preference.
PROGRESS OF DICs
DICs have played a vital role in providing various helps and self-employment to entrepreneurs in rural and backward areas. They have motivated and developed new entrepreneurs. These centres have also been of help in setting up SSI, cottage and artisan industries. They provided better living standards to the persons who are living below the poverty line. They prepare “action plans” for the district and encourage research. They provided infrastructure and technical facilities to small entrepreneurs. They undertook many entrepreneurs development programmes and prepared new entrepreneurs, They opened up wider opportunities to people residing in rural and smaller areas.