*NEED FOR RESTRUCTURING ENTREPRENEURSHIP
DEVELOPMENT PROGRAMMES IN INDIA
DR H.G.JOSHI
MANIPAL INSTITUTE OF MANAGEMENT
M.I.T. CAMPUS
MANIPAL
KARNATAKA STATE- 576104
INDIA.
[email protected]
Abstract
The true spirit of Entrepreneurship can remove the trade barriers and reap the benefits of
globalization for a country like India. Entrepreneurship is ubiquitous and is reflected in
all the major dimensions of civilization viz. social, political and economical involving
creativity which has an healthy edge over change. Entrepreneurship is a creative human
act involving the mobilization of resources from one level of productive use to a higher
level of use requiring a willingness to take responsibility and ability to put oneself to a
task and see it through from inception to completion. Essence of Entrepreneurship is
going against time with maturity and serving as a change agent. In India there is a dearth
of quality people in industry, which demands high level of entrepreneurship development
programmes through out the country for the growth of Indian economy. The scope of
entrepreneurship development in countries like India is tremendous since there is
widespread concern that the acceleration in GDP growth in the post- reforms period has
not been accompanied by a commensurate expansion in employment. The rising
unemployment rate (9.5% 2007 est.) in India has resulted in growing frustration among
the youth added to that the problem of underemployment. Entrepreneurial activities in the
country are the only solace to be put into real act. This paper aims at studying the present
scenario of EDP’s and throw light on requisites in order to achieve a high level of success
to both the participants and the country.
Entrepreneurship:
Entrepreneurship is ubiquitous and is reflected in all the major dimensions of
civilization viz. social, political and economical, thus involving creativity which has an
healthy edge over change. Entrepreneurship is a creative human act involving the
mobilization of resources from one level of productive use to a higher level of use
requiring willingness to take responsibility and ability to put oneself to a task and see it
through from inception to completion. Essence of Entrepreneurship is going against time
with maturity and serving as a change agent. The true spirit of Entrepreneurship can
remove the trade barriers and reap the benefits of globalization for a country like India.
Factors Influencing Entrepreneurship:
INDIVIDUAL
ENVIRONMENT
ENTREPRENEURSHIP
SOCIO-CULTURAL
FACTORS
SUPPORT
SYSTEMS
Figure: 1
The factors related to the formation of entrepreneurial organizations are Socio-cultural,
Environment, Support system and Individual. Among all the driving forces, an
individual’s attitude towards entrepreneurship can be measured depending upon the type
and size of support made available to him irrespective of his mindset.
Entrepreneurial Education:
In this context, the importance of entrepreneurial education and training for motivating
educated youth to self-employment is recognised by development economists, planners
and policy makers, as well as Governments of most countries of the world. The
entrepreneurial education focuses on enhancing the entrepreneurial qualities of people
through special type of training and education among the potential persons in a society.
An entrepreneurship education course includes the contents that help the students to be
aware of economic opportunities, business environment, identification of project,
preparation of business plan, improving motivation for achievement, techniques of
enterprise management, self-development techniques, improving precision skill etc.
Other objectives are concerned with building self-confidence, opportunity sense,
sensitivity and analytical skills. In India, entrepreneurship education is a popular course
in business and technical education curricula in many Government as well as Privateowned Universities. Apart from them, Agencies established for the purpose of
Entrepreneurship Development are also offering several modules at National, State and
Regional levels to uplift the masses and to relieve the unemployed from the evils of
unemployment. It is taught either as a course of under-graduate and post-graduate
program or through the establishment of separate centre/institute.
EDP and Agencies in India:
The agencies engaged in EDP work may be grouped as follows:
i) 15 Small Industries Service Institute (SISls) set up by the Government of India. They
conduct programmes primarily for fresh engineers, technical diploma-holders and
unemployed science graduates.
(ii) 16 Technical Consultancy Organisations (TCOs), jointly sponsored by all-India
financial institutions like Industrial Development Bank of India (lDBI), Industrial Credit
and Investment Corporation of India Limited (ICICI), Industrial Finance Corporation of
India (IFCI), along with state level financial institutions. The TCO programmes for entrepreneurship development are meant for young graduates, educated unemployed, and in
some cases, experienced employees, traders and women.
(iii) Some other agencies such as nationalized banks (other than SBI), Management
Institutes and voluntary organizations; universities and colleges also are now beginning
to start EDPs by way of a few elective papers as part of their regular course of study.
With such burgeoning EDP activities, Government has felt that it is the right time to ripe
for the emergence of some apex, all-India institution to help and guide the next phase of
consolidation and development of EDP work in the country. Accordingly, the following
two kinds of institutions were set up:
o National Institute for Entrepreneurship & Small Business Development &
Entrepreneurship Development Institute of India
o Promotional Agencies: - EDC’s, STEP and other Institutional programmes
to educate train and promote Entrepreneurship in the areas of Science and
Technology.
Keeping before them entrepreneurial development as Prime objectives, the above
agencies engage themselves in variety of activities such as Entrepreneurship Awareness
Camps, Entrepreneurship Development programmes, Faculty Development programmes,
Management Development programmes, Skill Development programmes etc.
Methods followed by the agencies for Training:
Every Entrepreneurship Development Agency has unique methods for conducting
Entrepreneurship Development Programmes. Starting from the selection of candidates to
valedictory function, imparting of both theoretical and practical training are found in their
training agenda. The contents of the Entrepreneurship development course include,
among others, concept, entrepreneurship as career plan, entrepreneurship theory,
entrepreneurial motivation, business environment, the role of entrepreneurs in economic
development, project ideas generation, selection of project, preparation of business plan,
Project management, social responsibility of the Entrepreneurs in developed & newly
industrialized countries etc. The courses for different levels of participants differ keeping
in view the participants requirements and absorbing capacity.
Overall performance of the training on entrepreneurship development programs differs
according to target groups. At all levels of income-generating programs organised both
by governmental and non-governmental agencies, the programmes are mostly related to
orientation and motivation sessions and in some cases, skill development training efforts
and impact achieved through distribution of micro loans to needy beneficiaries. On an
average, every agency conducts two entrepreneurship development programmes per year.
This estimate goes as high as 10 programmes also in a few cases.
The Success rates:
Even after professional training through such programmes, agencies claim that they could
not achieve high level of success. This rate varies from region to region and agency to
agency. The success rates are high only in institutes like EDI, Ahemadabad, NIESBUD
etc.
The Lacuna:
To understand the problems associated with low success rate of EDP, a study was
conducted by the author in southern part of Karnataka State, India. About 150 EDP
participants (both male and female), 16 EDP organising agencies were contacted in order
to understand their pulse and thus throw light on EDP prospective. The result depicts a
few strange, but interesting information about the conduct and purpose of EDP’s as
highlighted by the agencies.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
EDP’s are conducted so as to show the required quota of programmes in a few
agencies.
The training inputs are only theoretical without any practical orientation.
A few programmes were dummy in nature.
In few cases the data of participants provided by the agencies are false
Same participants took part in several programmes.
Selection of participants was neither scientific nor need based; they were
made to attend the programmes merely for the sake it.
Many participants were under the impression that soon after the training they
would be eligible for financial assistance.
The feed back of earlier programmes was not taken into consideration. Instead
the coordinators repeated similar mistakes which were pointed out.
The trainers and training aids were not updated.
When called for counselling, coordinators were either reluctant or lethargic to
share their valuable experience in enterprise start- up process.
The general awareness about such programmes in this region is also very low. Getting
sufficient number of participants, making them attentive and serious, were all the
major problems of agencies. This hampers the success rate too.
How to solve it?
The EDP’s are generally designed for either the potential or the existing
entrepreneurs. The success rate of EDP’s can be assessed on the basis of number of
new enterprises set up by the EDP participants, the improvements made as a result of
EDP. In both the cases of the above, reports of supportive agencies are not
encouraging. The challenges, therefore, are how to boost up the initiation of new
enterprises and how current problems associated with EDP’s can be resolved.
The study conducted by the author on 12 garages and 7 technology based enterprises
reflects the fact that 77% successfully could launch new enterprises, 7% stick on to
the employer or trainer and rest (16%) are the drop outs. As compared to any other
support agency EDP’s the above rate is healthy and serves the purposes of EDP.
Logically, if training is effective in garage and other technology based enterprises,
effort shall be made to develop similar model for the conduct EDP’s so as to justify
the utilisation of varied resources that are constantly explored and channelised to this
genuine cause.
The requirement:
A) Motivation and Selection of Candidates for EDP:
i)
A clear understanding of the feasibility and objectives and needs assessment
before programme formulation is useful. An analysis of high-growth economic sectors
enables more focused support to entrepreneurs in the most promising sectors of the
economy. Entrepreneurship development should be about helping people start and grow
dynamic businesses that provide high value addition. Factors like perception of
opportunity, degree of respect accorded to entrepreneurs, acceptance of wide disparities
in income and a family environment which is oriented towards business etc. are to be
identified. As a pre-promotion for EDP creating awareness to the family members would
serve the purpose as it is seen in a number of cases parents’ aspiration hinders the
participation of candidates in EDP.
ii)
Entrepreneurship development programmes require a selection process that
attempts to identify those target groups that have some of the key prerequisites for
entrepreneurial success. The selection of those who are most likely to succeed as
entrepreneurs should be based on clear and transparent criteria. More orientation can be
on general entrepreneurship rather than on exclusive characteristic of high-tech or
knowledge-intensive enterprises.
iii)
An entrepreneurship development programme should help aspiring entrepreneurs
to recognize and design unique, innovative business opportunities, based on an analysis
of local conditions and their own special skills. The programme can help the entrepreneur
to diversify based on his/her basic knowledge of a product or skill in a certain sector
without distorting the local markets. In a truly entrepreneurial approach, innovative
capacity matters more than the size of the market.
B) Form of EDP Provider:
In order to implement innovative and cost-effective entrepreneurship development
programmes, organizations with development orientation, operational autonomy,
business connections and flexibility for promotions, fund-raising and coordination tasks
can be formed. It could be a university, a non-governmental orgainzation (NGO), a
private consulting company or a specially established foundation based on public-private
partnerships.
C) Training Pedagogy:
In today’s complex environment, a multifunctional continuum of support to entrepreneurs
can be more effective.
i)
The training process may be-Identification of needy trainees-Providing on the job
training –allow them to start their own firm after the training. Provide full cooperation
and support for such entrepreneurs without considering them as competitors. The
development of one’s own network in this regard will overcome all possible negative
outcomes of such technical training.
ii)
The Programme should begin with developing competencies and move on to
supporting the trained candidates with counseling and other business support. The
mechanism for integrated support can take the form of establishment of business
incubators to nurture the early-stage businesses through continuing entrepreneurship
development, counseling and administrative services.
C)
Success also depends on the quality and commitment of the trainers and
facilitators. They should become an integral part of the target group and understand its
culture and needs. Faculty Development Programmes to train the trainers are very
essential.
D)
It is imperative that ED programmes create a strong local sense of ownership by
involving local organizations and building local capacities from the start. Creation of a
network with existing institutions in the field of Entrepreneurship Development and
developing specialized services within the network will ensure regular and continuous
availability of training resources both for pre- training and after- training needs.
E)
Ensure involvement of Government Officials, Law making bodies. This will be
very fruitful in assessing the impact of EDP as they witness the ongoing programmes and
understand the reality so as to consider revision, up gradation or deletion of any clauses
that affect EDP Policies.
Conclusion:
There are ample opportunities for Entrepreneurship in India and such opportunities will
transform India in the coming future. For such transformation to happen there needs to be
support both at the governmental and societal level. For the government it is important to
realize that the goal of entrepreneurs to remain self-employed and create employment
opportunities. Such people may not need financial assistance but they will need moral
support and assistance in the form of policies in order to sustain themselves. The success
of such entrepreneurs will be the eye openers for the younger generation. The parents, in
a way shall also take courageous steps to prepare their wards to look at entrepreneurship
related profession than simply force them to take up other popular courses. Agencies
shall explore more practical and cost effective programs and need to address these
because self-employed people will represent an important segment in economic
revitalization. To make these programmes more effective, what needs to be done is to
streamline the process of implementation to promote the spirit of entrepreneurship and
train the eligible for better and market trnsforming entrepreneurship.
Entrepreneurship development is the key factor to fight against unemployment, poverty
and to prepare ourselves for globalization in order to achieve overall economic progress
of India.
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