Chapter: 2

Entrepreneurship Development Programs

Concept of Entrepreneurial development:
It is an elusive concept which is defined differently by different authors. Some call it as “risk
bearing” others view it “innovating” and yet others consider it “thrill-seeking”.
Entrepreneurship refers to the functions performed by an entrepreneur in establishing an
enterprise. Just as management is regarded as what managers do entrepreneurship may be
regarded as what entrepreneurs do. In other words involving various actions to be
undertaken to establish an enterprise. It is thus a process of giving birth to a new
enterprise.

Innovation and risk bearing are regarded as the two basic elements involved in
entrepreneurship. Let us understand what these two terms actually mean.

Innovation: Innovation, i.e., doing something new or different is a necessary condition to

be called a person as an entrepreneur. The entrepreneurs are constantly on the look out to
do something different and unique to meet the changing requirements of the customers.
They may or may not be inventors of new products or new methods of productions but they
posses the ability to foresee the possibility of making use of the inventions for their
enterprises. Customer’s tastes and preferences keep changing hence the entrepreneur need
to apply invention after invention on a continuous basis to meet the customers changing
demands for products.

Risk-Bearing: Starting a new enterprise always involves risk and trying for doing
something new and different is also risky. The reason is not difficult to seek. The enterprise
may earn profits or incur losses because of various factors like increasing competition,
changes in customer preferences, and shortage of raw material and so on. An entrepreneur
therefore needs to be bold enough to assume the risk involved in the enterprise. In fact he
needs to be a risk-taker not risk avoider. His risk-bearing ability enables him even if he fails
in one time or one venture to persist on and on which ultimately helps him succeed. The
Japanese proverb applies to him:

“Fall seven times, stand up eight.”

Though the term entrepreneur is often used interchangeably with entrepreneurship, yet
they are conceptually different. The relationship between the two is just like the two sides of
the same coin.

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 Entrepreneur Entrepreneurship

Person Process
Organizer Organization
Innovator Innovation
Risk-Bearer Risk-Bearing
Motivator Motivation
Creator Creation
Visualizes Vision
Leader Leadership
Imitator Imitation

Thus entrepreneurship is concerned with the performance and coordination of the

entrepreneurial functions. This also means that the entrepreneur precedes
entrepreneurship.

Need for EDP’s

Entrepreneurs possess certain traits or competencies. These are the underlying
characteristics of the entrepreneurs which result in superior performances. Hence the
question arises as to whether these characteristics are in born in the entrepreneurs or can
be induced and developed? In other words whether entrepreneurs are born or made?
Behavioural scientists have tried to seek answers to these questions.

A well known behavioral scientist David McClelland at Harvard University made an

interesting investigation were in he found out that the need for achievement was the
answer. It was need to achieve to motivate people to work hard. According to him money
making was incidental. It was only a measure of achievement not its motivation. In an other
study David wanted to check if his need for achievement could be induced this
study/experiment of him was known as the “Kakinada Experiment”. Under this experiment
young people were selected and put through 3 months of training program and motivated to
see fresh goals. On e of the significant conclusions of the experiment was that the
traditional beliefs did not seen to inhibit an entrepreneur and that the suitable training can
provide the necessary motivation to the entrepreneurs. The achievement motivation had a
positive impact on the performance of the entrepreneurs. The Kakinada experiment could be
treated as a precursor to the present day EDP inputs on behavioral aspects. In fact it was
the Kakinada experiment that made people appreciates the need for the importance of the
entrepreneurial training now known as EDP to induce motivation and competence among

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the young prospective entrepreneurs. Based on this realization India embarked in 1971 on a
massive program of entrepreneurship development. Since then there is no looking back. At
present some 686 all India and state level financial institutions and public sector banks had
so far conducted EDP’s in hundreds giving training to the candidates in thousands. Programs
similar to India’s EDP’S are conducted in other countries also for example “Junior
achievement” program based on the principle of “catch them young” in USA and “Young
Enterprises” in the UK.

Objectives Of EDP’s
The important objectives of the Entrepreneurship Development Programs are to:

 Develop and strengthen their entrepreneurial quality i.e., motivation or need for
achievement.
 Analyze environmental set up relating to small industry and small business.
 Select product
 Formulate project for the product
 Understand the process and procedure involved in setting up a small enterprise.
 Know the sources of help and support available for starting a small-scale industry.
 Acquire the necessary managerial skills required to run a small enterprise.
 Know the pros and cons in becoming an entrepreneur.
 Appreciate the needed entrepreneurial discipline

Besides some of the other important objectives of the EDP’s are to :

 Let the entrepreneur himself/herself set or reset objectives for his/her business and
strive for their realization.
 Prepare him/her to accept the uncertainty involved in running a business.
 Enable him/her to take decisions.
 Enable to communicate clearly and effectively
 Develop a broad vision about the business.
 Make him subscribe to industrial democracy.
 Develop passion for integrity and honesty.
 Make him learn compliance with law.

Course contents and curriculum of EDP’s

The course contents of an EDP are selected in line with the objectives of the EDP’s. The
training programs usually to 6wks duration. It consists of the following 6 inputs:

General introduction to Entrepreneurship: The participants are exposed to a general

knowledge of entrepreneurship such as the factors affecting small-scale industries, the role
of entrepreneurs in economic development, entrepreneurial behavior and the facilities
available for establishing small-scale enterprises.

Motivation Training: The training inputs under this aim at inducing and increasing the
need for achievement among the participants. This is in fact a crucial input of
entrepreneurship training. Efforts are made to inject confidence and positive attitude and

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behavior among the participants towards business. It ultimately tries to make the
participants to start their own business enterprise after the completion of the training
program. In order to further motivate the participants sometimes successful entrepreneurs
are also invited to speak about their experience in setting up and running a business.

Management Skills: Running a business whether large or small requires the managerial
skill. Since a small entrepreneur cannot employ management experts to manage his/her
business he/she needs to be imparted basic and essential managerial skills in the functional
areas like finance, production and marketing. Knowledge of managerial skills enables an
entrepreneur to run his/her enterprise smoothly and successfully.

Support system and procedure: The participants also need to be exposed to the support
available from different institutions and agencies for setting up and running small-scale
enterprises. This is followed by acquainting them with procedure for approaching them
applying and obtaining support from them.

Fundamentals of projects feasibility study: Under this input the participants are
provided guidelines on the effective analysis of feasibility or viability of the particular project
in view of marketing, organization, technical, financial and social aspects. Knowledge is also
given how to prepare the project or feasibility report for certain products.

Plant Visits: In order to familiarize the participants with real life situations in small
business, plant visits are also arranged. Such trips help the participants know more about
an entrepreneur’s behavior, personality, thoughts and aspirations. These influence him/her
to behave accordingly to run his/her enterprise smoothly and successfully.

Phases of EDP’s
An entrepreneurship development programme consists of the following three phrases:

 Pre-Training Phase
 Training Phase
 Post-Training Phase(Follow-up)

Pre-training phase:
The activities and preparations required to launch the training programme come under this
phase. This phase includes the following:

 Selection of entrepreneurs.
 Arrangement of infrastructure.
 Tie-up of Guest faculty for the training purposes.
 Arrangement for inauguration of the programme.
 Selection of necessary tools, techniques to select the suitable entrepreneurs.
 Formation of selection committee for selecting trainees.
 Arrangement for publicity media and campaigning for the programme.

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  Development of application form.
 Finalization of training syllabus
 Arrangement for publicity media and campaigning for the programme.
 Development of application form.
 Finalization of training syllabus.
 Pre-potential survey of opportunities available in the given environmental conditions.

Training 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.

The trainer should see the following changes in the behavior of the trainees.

 Is he/she attitudinally tuned very much towards his/her proposed project idea.
 Is the trainee motivated to plunge into entrepreneurial career and bear risks involved
in it.
 Is there any perceptible change in his entrepreneurial attitude, outlook, skill, role
etc.
 How should he/she behave like an entrepreneur?
 What kind of entrepreneurial traits the trainee lacks the most?
 Whether the trainee possesses the knowledge of technology, resource and other
knowledge related to entrepreneurship?
 Does the trainee possess the required skill in selecting the viable project, mobilizing
the required resources at the right time?

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

Post-Training Phase (Follow –Up):

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

In other words the purpose behind the EDP follow-up is to:

 Review the pre-training work

 Review the process of training programme
 Review past training approach