Entrepreneurship Development Program

Entrepreneurship Development Programme (EDP) is a programme which helps in developing

entrepreneurial abilities. The skills that are required to run a business successfully is developed
among the students through this programme. Sometimes, students may have skills but it requires
polishing and incubation. This programme is perfect for them. This programme consists of a
structured training process to develop an individual as an entrepreneur. It helps the person to
acquire skills and necessary capabilities to play the role of an entrepreneur effectively.
 
EDP is an effort of converting a person to an entrepreneur by passing him through thoroughly
structured training. An entrepreneur is required to respond appropriately to the market and he/she
is also required to understand the business needs. The skills needed are varied and they need to
be taken care in the best possible way. EDP is not just a training programme but it is a
complete process to make the possible transformation of an individual into an
entrepreneur. This programme also guides the individuals on how to start the business and
effective ways to sustain it successfully.

According to N. P. Singh :

"Entrepreneurship Development Programme is designed to help an individual in strengthening

his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his
entrepreneurial role effectively. is necessary to promote this understanding of motives and their
impact on entrepreneurial values and behavior for this purpose”.

EDP can also be defined as a pre-defined process that recognizes, inculcates, designs and refines
the skills and proficiencies of an individual to establish his own enterprise. In recent times, EDP
has become a professional task which extensively encourages the development of funded and
private businesses. .

Few important definitions of EDPs given by institutions and experts:

Small Industries Extension and Training Institute (SIET 1974), now National Institute of Small
Industry Extension Training (NISIET), Hyderabad defined EDP as “an attempt to develop a
person as entrepreneur through structural training.

The main purpose of such entrepreneurship development programme is to widen the base of
entrepreneurship by development achievement motivation and entrepreneurial skills among the
less privileged sections of the society.”
According to N. P. Singh (1985), “Entrepreneurship Development Programme is designed to
help an individual in strengthening his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role effectively. It is necessary to promote
this understanding of motives and their impact on entrepreneurial values and behaviour for this
purpose.” Now, we can easily define EDP as a planned effort to identify, inculcate, develop, and
polish the capabilities and skills as the prerequisites of a person to become and behave as an
entrepreneur.

Need for EDPs:
That, entrepreneurs possess certain competencies or traits. These competencies or traits are the
underlying characteristics of the entrepreneurs which result in superior performance and which
distinguish successful entrepreneurs from the unsuccessful ones.

Then, the important question arises is: where do these traits come from? Or, whether these traits
are in born in the entrepreneurs or can be induced and developed? In other words, whether the
entrepreneurs are born or made? Behavioural scientists have tried to seek answers to these
questions.

A well-known behavioural scientist David C. McClelland (1961) at Harvard University made

an interesting investigation-cum-experiment into why certain societies displayed great creative
powers at particular periods of their history? What was the cause of these creative bursts of
energy? He found that ‘the need for achievement (n’ ach factor)’ was the answer to this question.
It was the need for achievement that motivates 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 Kakinada, i.e. one of the prosperous districts of
Andhra Pradesh in India in collaboration with Small Industries Extension and Training Institute
(SIET), Hyderabad.

This experiment is popularly known as ‘Kakinada Experiment’. Under this experiment, young
persons were selected and put through a three-month training programme and motivated to see
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 (McClelland & Winter 1969). The achievement motivation had a positive
impact on the performance of entrepreneurs.

In fact, the ‘Kakinada Experiment’ could be treated as a precursor to the present day EDP inputs
on behavioural aspects. In a sense, ‘Kakinada Experiment’ is considered as the seed for the
Entrepreneurship Development Programmes (EDPs) in India.

The fact remains that it was the ‘Kakinada Experiment’ that made people appreciate the need for
and importance of the entrepreneurial training, now popularly known as ‘EDPs’, to induce
motivation and competence among the young prospective entrepreneurs.

Based on this, it was the Gujarat Industrial Investment Corporation (GIIC) which, for the first
time, started a three-month training programmes on entrepreneurship development. Impressed by
the results of GIIC’s this training programme, the Government of India embarked, in 1971, on a
massive programme on entrepreneurship development. Since then, there is no looking back in
this front. By now, there are some 686 all-India and State level institutions engaged in
conducting EDPs in hundreds imparting training to the candidates in thousands.

Till now, 12 State Governments have established state-level Centre for Entrepreneurship
Development (CED) or Institute of Entrepreneurship Development (lED) to develop
entrepreneurship by conducting EDPs. Today, the EDP in India has proliferated to such a
magnitude that it has emerged as a national movement. It is worth mentioning that India operates
the oldest and largest programmes for entrepreneurship development in any developing country.

The impact of India’s EDP movement is borne by the fact that the Indian model of
entrepreneurship development is being adopted by some of the developing countries of Asia and
Africa. Programmes similar to India’s EDPs are conducted in other countries also, for example,
‘Junior Achievement Programme’ based on the principle of ‘catch them young’ in USA and
‘Young Enterprises’ in the U. K.

Objectives of EDP

Following are the main objectives of EDPs :

 1. To make people learn compliance with law.
2. To develop and fortify entrepreneurial quality, i.e., motivation or need for achievement.
3. To develop small and medium scale enterprises in order to generate employment and
widen the scope of industrial ownership.
4. To industrialize rural and backward sections of the society.
5. To understand the merits and demerits of becoming an entrepreneur.
6. To investigate the environmental set-up relating to small industries and small businesses.
7. To design project for manufacturing a product.
8. To increase the supply of entrepreneurs for quick industrial development.
9. To prepare individuals to accept the uncertainty involved in running a business.
10. To develop managerial skills among small entrepreneurs for improving the performance
of small-scale industries.
11. To offer profitable employment opportunities to educated young men and women.
12. To expand the sources of entrepreneurship.

Roles of EDP
An Entrepreneurship Development Programme primarily plays four roles to help an individual to
become an entrepreneur. They are:
 Stimulatory Role: It aims at influencing people in large number to be the entrepreneur. This
includes:
1. developing managerial, technical, financial, and marketing skill
2. inculcating personality traits
3. promotes and reforms entrepreneurial behavior and values
4. identifying a potential entrepreneur applying scientific methods
5. motivational training and building a proper attitude
6. strengthening the motive of a person and giving recognition
7. the valuable know-how of the local products and the processes help in the selection of
products, preparation of project reports
 
 Supportive Role: It helps in the following ways:
1. registration of the business
2. procurement of fund
3. Incubation support
4. Team building and team development support
5. Mentorship and guidance from industry experts
6. Providing tax relief, subsidy, government schemes etc.
7. guidance in product marketing
8. support for management consultancy
  
 Sustaining Role: It aims at providing an effective safeguard to businesses to sustain against the
cut-throat market competition. This includes:
1. help in modernization, expansion, and diversification
2. additional financing for further development
3. Global Networking Opportunities
4. creating new marketing processes
5. helping access to improved services and co-working centers
 
 Socio-economic Role: It aims at upgrading the socio-economic status of the public and
includes:
1. identifying entrepreneurial qualities in practicality
2. creating employment opportunities in micro, small, and medium industries on an immediate
basis
3. arresting concentration of industries by supporting regional development in a balanced manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise

Relevance/ Importance Of EDP

1.Eliminating Poverty and unemployment

2. Balanced Regional Development
3.Economic Growth
4.Optimum use of locally available resources
5.Promotes innovation
6.Defuses Social Tension
7. Development of Entrepreneurship qualities
8. Preventing Industrial slums
9. Fulfillment of Dreams
10. Successful launching of new units
11. Development of Rural and Backward Areas

Phases of EDP

All the EDPs mainly consist of three phases, which are illustrated as below:

1) Pre-Training Phase : 

This step can be considered as the introductory phase in which the entrepreneurship development
programmes are launched. A wide spectrum of activities are performed in this phase arc
described below :
i) Identification of suitable location where the operations can be initiated like a district.

ii) Selection of an individual as a course coordinator or project leader to coordinate the EDP
activities.

iii) Organisation of basic infrastructural facilities related to the programme.

iv) Conducting the environmental scanning or industrial survey in order to look for better
business opportunities.

v) Developing various plans associated with the programme, like :

a) Promotional activities by using electronic or print media, posters, leaflets, etc.

b) Contacting business experts, different agencies, NGOs that can become a part of the
programme, directly or indirectly.

c) Printing the application forms and availing them in different locations with the instructions.

d) Establishing selection committee for screening of candidates.

e) Preparing budget and getting it approved from the management and arranging other activities
which are related to the programme.

f) Arranging and deciding the need-based elements in the syllabus of training programme and to
contact guest faculties for the training session.

vi) Looking for the assistance of various agencies such as DICs, banks, SISI, NSIC, DM and so
on.

vii) Conducting industrial motivational campaigns to increase the number of applications.

2) Training Phase : 

The main function of any EDP is to impart training to future entrepreneurs and guiding them for
establishing the enterprise. The normal duration of the entrepreneurship development programme
is 4-6 weeks and it is usually a full time course. The objectives, training inputs and the centre of
focus are explained in the programme design.
Commonly, it is considered that the trainees do not have enough information about the change
because of which new programme is prepared. Each trainee should appraise himself at the
termination of the training programme to have a clear view about his/her future endeavours.

Training Phase - Programme Design

Objectives Focus Inputs

Promoting and
sustaining the skills of
entrepreneurship and Entrepreneur. Behavioral inputs.
building up
the confidence.

Business opportunity
guidance,
information and project
planning inputs, technical
inputs. Guiding for
Helping in establishing Enterprise establishment enabling business
the new enterprise Creating enterprise. opportunities. informatio
through decision- n and project planning
making. and technical opinions.

Successful and profitable Enterprise Management inputs, plant

operation of enterprise. management, first-hand visit/in-plant training
Industrial exposure knowledge of factory Management suggestions
Performing profitable layout, business sites, industrial visit or training.
and successful etc. Information related
operations, exposure to factory layout, plant
various industrial location, organisation
knowledge. management and so on.

3) Post-Training Phase : 

This phase is also referred as the phase of follow-up assistance. In this phase, the candidates who
have completed their programme successfully are provided post-training assistance. This phase is
 very important as after the completion of training programme, most of the entrepreneurs face a
lot of hardship in the business plan implementation. Thus, with the help of various counselling
sessions, the training organisations try to extend their support to trainees. Members like State
Financial Corporation, commercial banks, training institutions and District Industries Centre
constituted all together to assist the entrepreneurs on the basis of mentioned goals :

 To assist trainees in a meaningful manner so that trainees can realize their business plan.
 To analyse the development made by trainees in the project implementation.
 To evaluate the post-training approach.
 To provide escort services to the trainees with the help of various promotional and financial
institutions.

Commonly, these follow-up action meetings are conducted after every three years of training
completion and the tools used for the follow-up are :

 Postal questionnaires.
 Telephonic follow-up.
 Individual contact by the trainer.
 Team meetings.

A number of government and private institutions are providing assistance in India to

entrepreneurs. Some of them are listed below :

 Small Industries Development Organisation (SIDO),

 Commercial Banks,
 National Alliance of Young Entrepreneurs (NAYE),
 National Institute for Entrepreneurship and small Business Development (NIESBUD),
 Entrepreneurship Development Institute of India (EDI),
 India Investment Centre (LIC),
 Small-scale industrial Development Bank Of India (SIDBI), and
 Technical Consultancy Organisation (TCO).

The Importance of EDP

The importance of EDP is as follows :

1) Formation of Employment Opportunities :

Entrepreneurial development programmes generate employment opportunities in the developing

and under-developed countries. It assists and encourages individuals to establish their own
business and enable them to become self-employed. By setting-up. several business enterprises,
EDP also creates abundant job opportunities for other people.

2) Provides Adequate Capital : 

A large amount of capital is required to set-up a business enterprise. This financial assistance is
provided by various EDP agencies. EDPs instruct the development banks such as ICICI, IDBI,
IFCI, SIDCs, etc., to take initiative in promoting entrepreneurship.

3) Proper Utilization of Local Resources : 

New entrepreneurs utilize the available local resources in the most effective way. This
utilization of resources plays an important role in the development of a particular area or region
at minimum cost. EDPs .guide, educate and teach the entrepreneurs to exploit the local resources
efficiently.

4) Increased Per Capital Income : 

Entrepreneurs have the ability to organise the factors of production and utilize them in the most
productive manner by establishing an enterprise. This development leads to increased
production, employment and wealth generation. As a result, overall productivity and per
capital income of the economy is raised.

5) Improved Standard of Living : 

EDPs provide latest technologies and innovative methods to entrepreneurs which helps them to
produce large quantity of products at lower cost. This also enables entrepreneurs to exploit the
available resources and produce quality products. This automatically leads to improved standard
of living.

6) Economic Independence : 

EDPs strengthen the entrepreneurs to produce variety of products in large quantities at

competitive prices. It also helps an entrepreneur to develop substitutes of imported products
which prevents the country from being dependent on other foreign countries. It also saves
foreign exchange of the country.

7) Preventing Industrial Slums : 

Most of the developed industrial areas are facing problems related to industrial slums. This leads
to over burdening of public amenities and also affects the health of people adversely. EDPs
offers several subsidies, incentives, infrastructural support and financial grants to new
entrepreneurs for establishing their businesses, thus, preventing the growth of industrial slums.

8) Reducing Social Tension :  

A majority of youngsters and educated individuals of the society are in the state of social unrest
and tension. This social tension restricts them from finding the right direction in their careers.
Most of the students feel frustrated about not getting a job after the completion of education. In
such situations, EDPs helps people by providing them proper guidance, assistance, training and
support for establishing new enterprises and businesses, As a consequence, social tension is
reduced as they generate self-employment opportunities.

9) Facilitating Overall. Development : 

EDPs facilitate entrepreneurship which helps in the overall development of the society by
producing new products, innovative services, low cost consumer goods, job opportunities,
increasing the standard of living, and overall productivity. This facilitates in the overall
development of the economy and the country.
Entrepreneurship Development Programmes : Evaluation and Problems of EDPs

Developing entrepreneurship has become a movement in India in the recent years. EDPs have
been considered as an effective instrument for developing entrepreneurship in the countryside.
Hundreds of EDPs are conducted by some 686 organisations to impart entrepreneurial training to
participants in thousands.

The main objective of EDPs is to make the EDP trainee an enterprise creator. Hence, it seems
necessary to see whether, the objectives of EDPs is fulfilled or not. In simple words, there is a
need to have a retrospective look into how many participants have actually started their own
enterprises after completing the training. This calls for the evaluation of EDPs.

One of the earliest attempts in this direction was made by a team of researchers and experts
appointed by the Gujarat Industrial and Financial Corporation to evaluate the effectiveness of the
EDPs.

It is found that the effectiveness of the EDPs is around 26 per cent. In other words, one out of
every four trainees actually started his / her enterprise after undergoing entrepreneurial training.
However, the expected start-up rate is slightly higher around 32 per cent.

About 10 per cent trainees are found blocked due to various reasons at various stages in the
process of setting up their enterprises. It also suggests that if not helped effectively, they may
join the category of those 29 per cent trainees who have already given up the idea of launching
their ventures.

Out of 430 trainees who could not be contacted personally during the field survey, according to
the secondary sources, viz., family, friends, and neighbours, 17 per cent of them have already
given up the idea of venture launching as they are engaged in some other activities.
In nutshell, the effectiveness of EDPs cannot be considered as impressive because about 07 out
of every 10 trainees did not start enterprises after undergoing the EDP training. It means there
are some problems or lapses here and there in conducting the EDPs’. Therefore, there lies the
need for looking at the problems and constraints of EDPs.

One way of evaluating the EDPs is to assess their effectiveness in developing ‘need for
achievement’ among the entrepreneurs. This is also called the ‘qualitative evaluation of EDPs.
The behavioural scientists use the following criteria to assess the effectiveness of EDPs in
motivating the entrepreneurs:
a. Activity level of the respondents

b. New enterprise established

c. Total investments made

d. Investments in fixed assets made

e. Number of people employed

f. Number of jobs created

g. Increase in profit

h. Increase in sales

i. Quality of product/service improved

j. Quicker repayment of loans

In other behavioural experiments, the impact of EDPs is measured with the help of indices
relating to the entrepreneurial behaviour.

The entrepreneurial behaviour is measured on the following four dimensions:

1. Planning Orientation

2. Achievement Orientation

3. Expansion Orientation

4. Management Orientation

Problems of EDPs:
EDPs suffer on many counts. The problems and lacunae are on the part of all those who are
involved in the process, be it the trainers and the trainees, the ED organisations, the supporting
organizations, and the state governments.
The important problems EDPs face are but not confined to the following only:
a. Trainer-motivations are not found upto the mark in motivating the trainees to start their own
enterprises.

b. ED organisations lack in commitment and sincerity in conducting the EDPs. In some cases,
EDPs are used as means to generate surplus (income) for the ED organisations.

c. Non-conducive environment and constraints make the trainer-motivators’ role ineffective.

d. The antithetic attitude of the supporting agencies like banks and financial institutions serves as
stumbling block in the success of EDPs.

Thus, it is clear that the problems are not with the strategy but with its implementation.