ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.

COM

UNIT- 4
ENTREPRENEURSHIP DEVELOPMENT PROGRAM

HIGHLIGHTS

Introduction

Meaning of EDP

Need for EDP

Role and Relevance of EDP

Phases of EDP

Problems in conducting EDP

Suggestions to make EDP’s successful

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

INTRODUCTION
Entrepreneurial Development Program means a program conducted to
help a person in strengthening his entrepreneurial motive and in
acquiring skill and capabilities required for promoting and running an
enterprise efficiently. It is a program which is conducted with a motive
to promote potential entrepreneurs, understanding of motives,
motivational pattern, their impact on behavior and entrepreneurial value
is termed as entrepreneurial development program..

MEANING AND DEFINITION OF EDP- 2 marks

Meaning of EDP
strengthening and Entrepreneurial development program is designed to
help a person fulfilling his entrepreneurial motive and in acquiring skills
and capabilities necessary for playing his entrepreneurial role
effectively.

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

EDP is a program designed to help a person in strengthening his

entrepreneurial motive and in acquiring skills and abilities necessary for
playing his entrepreneurial role effectively.

Definition of EDP
EDP is defined as a program designed to help an individual in
strengthening his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role effectively.
EDP is defined as a process which instills entrepreneurial behavior in the
minds of entrepreneur in their day-to-day activities.

NEED FOR EDP

a) It helps in developing entrepreneurs,
b) It helps entrepreneurs in developing and improving the skills.
c) EDP is a tool of industrialization and path to economic growth
through entrepreneurship.
d) EDP helps in dispersal of economic activities in different regions by
providing training and other support to local people.
e) It provides opportunities for self-employment and entrepreneurial
careers.
f) EDP develops motivation, competence and skills necessary for
successful launching, management and growth of the enterprise.
g) EDP, by inculcating entrepreneurial capabilities and skill in the
trainees, create new generation
ASST. PROF .VIJAY DEV MCLAREN
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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

OBJECTIVES OF EDP – 5 marks

The important objectives of EDP:
1. To prepare entrepreneurs to accept risk and uncertainty involved
in running a business.
2. To develop broad vision of business passion for integrity and
honesty.
3. To make entrepreneurs understand and cope up with statutory
obligations,
4. To enable entrepreneurs to communicate clearly and effectively.
5. To give the knowledge of sources of help, and help available for
starting a small scale industry.
6. To make them understand the process and procedures and
formalities involved in setting up enterprise.
7. To prepare them to analyze environmental set up relating to small
industry.
8.To train entrepreneurs to take right decision at the right time.

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

IMPORTANCE OF EDP
EDP can be beneficial in the following ways:
i) Economic Growth: EDP is a tool of industrialization on and path to
to economic growth through entrepreneurship.
ii) Balanced Regional Development: EDP helps in dispersal of
economic activities in different regions by providing training and other
support to local people.
iii) Eliminates Poverty and Unemployment: EDPs provide
opportunities for self-employment and entrepreneurial careers.
iv) Optimum use of Local Resources: The optimum use of natural,
financial and human resources can be made in a country by training and
educating the entrepreneurs.
v) Successful Launching of New Unit: EDP develops motivation,
competence and skills necessary for successful launching, management
and growth of the enterprise.
vi) Empowers New Generation Entrepreneurs: EDP, by inculcating
entrepreneurial capabilities and skill in the trainees, create new
generation entrepreneur who his\ her to was not an entrepreneur.

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

ROLE OF EDP 15 marks

1. Eliminates poverty and unemployment
The basis problems of most of the developing countries like India are
poverty and unemployment. Entrepreneurship development program can
help the unemployed people to opt for self-employment and
entrepreneurial as a career.
2. Balanced regional development
Successful Entrepreneurial development programs help in foster the
industrialization and reduces the concentration of economic power. It is
because the small-scale entrepreneurs can setup their units in remote
areas with little financial resources which can help in achieving balanced
regional development.
3. Prevents industrial slums
The urban cities are highly congested and leading to industrial slums.
Decentralization of industries is very much required by relocating the
industries.
This will control the industrial slums and also reduce the pollution,
traffic congestion, overcrowding in cities etc.
4. Harnessing locally available resources
Since abundant resources are available locally, proper use of these
resources will help to carve out a health base for sound economic and
rapid industrialization.
5. Defuses social tension

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

Every young person feels frustrated if he does not get employment after
completing his education. The talent of the youth must be diverted to
self-employment careers to help the country.
6. Capital formation
The various development banks like ICICI, IDBI, IFCI, SFC, SIDC and
SIDBI take initiative in promoting entrepreneurship through assistance
to various agencies involved in EDP and by providing financial help to
ne entrepreneurs. It is impossible to start a new enterprise without
sufficient funds.
7. Economic independence
Entrepreneurs develop and produce substituted products of imported
goods and prevent the over-dependence on other countries.
They also enable the country to produce different variety of better
quality goods and services q at competitive prices of imported goods
which help in promoting the economic independence of the g country.
8. Improvement in per capita income
The overall increase in productivity and income help in improvement in
per capita income. EDPs play a significant role in setting up of more
industrial units to generate more employment opportunity and to secure
improved per capital income. ha
9. Facilitating overall development
Entrepreneurs act as agents of proper use of various limited resources
such as men, money, material, machines etc. which leads to overall
development of an area, an industry.

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

RELEVANCE OF EDP – 15 marks

1. Creation of Employment
Unemployment is one of the most important problems confronting
developing and underdevelopment 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.
2. Capital Formation
It is not possible to set up an enterprise without adequate funds.
Entrepreneur as an organizer of factors of production employs his own
as well as borrowed resources for the setting up of enterprise.
Entrepreneur mobilizes idle savings of the public and put them to
productive use.
3. 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, Entrepreneurs
feel like taking advantage of the various concessions and subsidies
offered by the state and central government.
4. 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

ASST. PROF .VIJAY DEV MCLAREN

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seize the opportunity and exploit it in the best interests of the area and
industry.
5. Improvement in per Capital Income
Entrepreneurs are always on the lo lookout for opportunities. They
explore and exploit the opportunities. Entrepreneurs take lead in
organizing various factors of production by putting them into productive
use through the setting up of enterprises.
6. Improvement in the Standard of Living
Entrepreneurs by adopting latest innovations help in the production of
wide variety of goods & services. By making efficient use of the
resources, they start producing more of better quality and that too at
lower costs.
7. Economic Independence
Entrepreneurs enable a country to produce wide variety of better quality
goods & services and that too at competitive prices. They develop
substitutes of the goods being imported and thus prevent over-
dependence on foreign countries and at the same time help in the saving
of precious foreign exchange.
8. Preventing Industrial Slums
Industrially developed areas are faced with 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.
9. Reducing Social Tension

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

Unemployment amongst the young and educated people is emerging as

the major cause of social unrest. People are bound to feel frustrated if
they fail to get gainful employment after completion of their education.
10. Facilitating Overall Development
An entrepreneur acts as a catalytic agent for change which results in
chain reaction . with the setting up of an enterprise the process of
industrialization is set in motion.

STEPS IN CREATING AND ENHANCING AN EFFECTIVE EDP

i) Outline the objectives of the program and focus on venture

development: Entrepreneurship development aims at individuals who
want to start or possibly expand a business. The air a program have to be
clearly explained otherwise the program will never reach its potential.

ii) Select educated people who have high entrepreneurial potential:

An entrepreneurship development program requires that various people
be selected. However, most programs to look for a specific group of
educated people rather than target everyone.
iii) Select uneducated people who have high entrepreneurial
potential: Even though people many people are uneducated, they have
great entrepreneurship potential because they have the right motivation.
iv) Identify the local market and search for people who have
potential in it: By concentrating on select local entrepreneurs, the
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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

effects of the program can be easily and quickly seen within the
community.
v) Provide support through private sector based organizations: By
concentrating on select local entrepreneurs, the effects of the program
can be easily and quickly seen within the community.
vi) Provide a methodology that will help in improving the
entrepreneurs in the short as well as long run: Entrepreneur
development training proves to be highly effective when finance, quality
assurance, marketing and productivity are linked to the training program.
vii) Implement measures to improve usefulness of trainers and
facilitators: Training facilitators can significantly improve their
usefulness in tackling the needs of entrepreneurs.
viii) Selection of areas for pilot program: Selecting pilot target areas
will usually depend on the ease at which support institutions are
available. It will also depend on the interest people take in
entrepreneurial development programs.
ix) Launch pilot ED programs: Analyzing pilot feasibility is an
effective way of launching a major entrepreneurship development
program. If the program shows signs of high promise, it can be launched
on a national level.
x) Government policies: Government policies usually have a
substantial impact on the number of entrepreneurs in a country.

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

PHASES OF EDP – 5 marks

Phase-1: Pre-training phase
Pre-training phase consists of all activities and preparation to launch
training program. Pre training phase of EDP consists of the following
activities:
Selection of entrepreneurs for the training program.
Arrangements of infrastructure are for the program like selection of
place of training.
Deciding guest faculty for the program from education industry and
banks. Taking necessary steps for inauguration of program.
Formation of selection committee to select trainees from the program.
Making provision with regard to publicity and campaigning for the
programme.
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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

Phase-2: Training Phase

The primary objective of training program is to develop motivation and
skill or competency amongst the potential entrepreneurs. Care should be
taken to impart both theoretical and practical knowledge to various
trainees. The training phase of EDP will be so designed that it will
answer the following questions:
(a) Whether the attitude of the entrepreneur has been tuned towards the
proposed project or no.
(b) Whether the trainee has been motivated to accept entrepreneurship as
a career. (c) How the trainee behaves like an entrepreneur.
(d) Whether the trainee has sufficient knowledge on resources and
technology or not.
(e) What kind of entrepreneurial traits he lacks and what steps should be
taken to set it.

Phase-3: Follow-up Phase

Follow up phase of EDP has been termed as post-training phase. The
ultimate objective is to develop competent entrepreneurs.
So that they can start their project. Post-training phase is a review phase
of training program. It consists of reviewing of work in the following
manner:
Review of pre-training work
Review of actual training program

ASST. PROF .VIJAY DEV MCLAREN

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 ENTREPRENEURSHIP DEVELOPMENT - 5th SEM , B.COM

Review of post training program so that cost effectiveness of the present

program can evaluated.

PROBLEMS IN CONDUCTING EDP- 5 marks

The various problems of entrepreneurship development program are:

i) Non Availability of Competent Faculty
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.
ii) Over Estimation of Trainees
Under EDPs 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 EDPs do not impart sufficient training and on the
other financial institutions are not prepared to finance these risky
enterprises set up by the not so competent entrepreneurs.
iii) Duration of EDPs
An attempt is made during the conduct of EDPs 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 EDPs varies between 4 to 6 weeks, which is
too short a period to instill basic managerial skills in the entrepreneurs.
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Thus the very objective to develop and strengthen entrepreneurial

qualities and motivation is defeated.
iv) No Policy at the National Level
Though 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.
v) Non Availability of Infrastructural Facilities
No prior planning is done for the conduct of EDPs. EDPs conducted in
rural and backward areas lack infrastructural facilities like proper class
room suitable guest speakers, boarding and lodging etc.
vi) Improper Methodology
The course contents are not standardized and most of the agencies
engaged in EDPs are themselves not fully clear about what they are
supposed to do for the attainment of pre-determined goals. This puts a
question mark on the utility of these program.
vii) Mode of Selection
There is no uniform procedure adopted by various agencies for the
identification of prospective entrepreneurs. Organizations conducting
EDPs prefer those persons who have some project ideas of their own and
thus this opportunity is not provided to all the interested candidates.
viii) Poor Response of Financial Institutions
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
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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.

ASST. PROF .VIJAY DEV MCLAREN

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