Entrepreneurial Development Programme EDPs | Objectives, Need and Weakness of EDPs | Entrepreneurship Development Notes

Entrepreneurial Development Programme (EDPs)

Entrepreneurship Development Notes

For B.Com, BBA and MBA

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In the post I have given a brief introduction of Entrepreneurs Development Programmes (EDPs). These notes are useful for the students of B.Com, BBA and MBA of various universities. For more notes visit our website regularly.

Table of Contents

1. Meaning of Entrepreneurs Development Programmes (EDPs)

2. History of Entrepreneurship Development in India

3. Objectives of Entrepreneurs Development Programmes (EDPs)

4. Need and Importance of Entrepreneurs Development Programmes (EDPs)

5. Weakness and Problems of entrepreneurship development programmes (EDPs) in India

6. Skill Development Programmed


Entrepreneurial Development Programme (EDP) can be defined as a programme, formally designed to help an individual in strengthening his/her entrepreneurial motive and in acquiring skill and capabilities necessary for playing entrepreneurial role effectively. In fact, it is an academic exercise to build up human resources by including them to take up entrepreneurial activities through motivation and developing the required entrepreneurial skills through exposure creation to effectively manage their enterprises. According to N.P. Singh, EDP is not merely a training programme. It is a process of:

a)      Enhancing and motivation, knowledge and skills of the potential entrepreneurs;

b)      Arousing and reforming the entrepreneurial behavior in their day-to-day activities; and

c)       Assisting them develop their own ventures or enterprise as a sequel to entrepreneurial action.

Thus, EDPs endeavous to change educate and equip a person to become a successful entrepreneur. The whole process envisages developing the participant’s latent qualities and skills as also equipping him with other capabilities. By the end of the programme, the participant is expected to be in a position to crystalise his vision in to action and launch and manage his enterprise with competence. The system involves a selection procedure and only those who prove to have certain minimum initial traits are selected as potential entrepreneurs to be trained up to develop the other required traits through interventions.

History of Entrepreneurship Development in India

Traditionally, Indian economy is purely agriculture based due to which our country is still a backward country. The experience all over the world proves that the economies which are predominately agrarian in character continue to remain backward and fails to sustain development. To diversify the Indian economy and to accelerate the entrepreneurial activities, The Government of India soon after attaining independence laid down its first Industrial Policy Resolution in 1948. In order to promote local entrepreneurs, ban on the imports of a large number of consumers and other goods imposed by the Government of India during the post independence period. Subsequently, during 1953-54, the Ministry of Commerce and Industry, Government of India, invited an International Planning Team under the courtesy of Ford Foundation to report on measures that could be adopted to develop small scale industries for promotion of indigenous entrepreneurship. The team strongly recommended the need for development of “Modern Small Scale Industries” to meet the need of time and pace. The team also recommended several measures for promotion and development of entrepreneurship in this sector of the economy.

Since then, the Government of India has been adopting a series of measures for promotion of local entrepreneurship in the country. In course of time, with unemployment problem taking serious turn, the self employment and Entrepreneurial Development Programmes (EDPs) came to receive serious attention in the country. The literature available indicates that the birth of training effort for the promotion of entrepreneurship in India was purely an indigenous initiative i.e. the “Technician Scheme” launched in the year by two state level agencies of Gujarat. The scheme visualized 100% finance without collaterals. A large number of people took the advantage of this scheme. The real gain of the scheme was the realization that there is vast entrepreneurial potential available in the country that could be tapped and developed through appropriate training intervention. This led the Gujarat Industrial Investment Corporation (GIIC), along with other state level agencies to conceptualize, mount and develop, in 1970, a 3-month long training programme known as Entrepreneurship Development Programme (EDP). However, with the number of programme increasing, the need for having a separate state level organization to look into selection, training and development of first generation entrepreneurs was strongly felt. Thus, the Centre for Entrepreneurship Development (CED), Gujarat, the first of its kind in the country came into existence in 1979 with the support of the Government of Gujarat and the industrial promotion and the assistance agencies in the state.

Meanwhile, the success story of Gujarat experiment spread far and wide and the Ford Foundation encouraged the Gujarat team to test out EDP strategy in a few less developed states like Rajasthan, Assam, etc. Several development agencies in other parts of the country also mounted their own EDPs and the Gujarat CED provided professional support to some of them.

There is another story of the origin of Entrepreneurship Development Programme (EDP) in India. The story suggests that the well known behavioural scientist David McClelland at Harvard University made an interesting investigation into why certain societies developed great creative powers at particular period of time of their history. He found that “the need for achievement” was the answer. It was the “need to achieve” that motivated people to work hard and money making was incidental. Money was only a measure of achievement, not its core motivation.

In order to answer the next question whether this need for achievement could be induced, McClelland conducted a five-year experimental study in one of the prosperous distracts of Andhra Pradesh in India in collaboration with the Small Industry Extension Training Institute (SIET); which later came to be known as the National Institute for Small Industry Extension Training (NISIET) and now called National Institute for Micro Small and Medium Enterprises (ni-msme), Hyderabad. This experiment is popularly known as “Kakinda Experiment”. Under this experiment, young persons were selected and put through a three month training programme and motivation to see fresh goals.

One significant conclusion of the experiment was that traditional belief did not seem to inhibit an entrepreneur and that suitable training can provide the necessary motivation to entrepreneurs. It was the Kakinda Experiment that made people appreciate the need for entrepreneurial training (now popularly known as EDPs) to induce motivation and competence among young prospective entrepreneurs. Based on this realization India embarked in 1971 on a massive programme of entrepreneurship development. At present there are more than 700 all India and state level institutions conduct EDPs.

The above findings reveal that EDP was conceptualized almost at the same time in two parts of India viz Gujarat and Andhra Pradesh. However, while the Gujarat model was applied first to organize massive EDPs in 1970, the Andhra Pradesh (SIET) model found its massive application in 1071.

Objectives of EDP: The major objectives of the Entrepreneurship Development Programmes (EDPs) are to:

a)      Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.

b)      Analyse environmental set up relating to small industry and small business.

c)       Select the product.

d)      Formulate proposal for the product.

e)      Understand the process and procedure involved in setting up a small enterprise.

f)       Know the sources of help and support available for starting a small scale industry.

g)      Acquire the necessary managerial skills required to run a small-scale industry.

h)      Know the pros and cons in becoming an entrepreneur.

i)        Appreciate the needed entrepreneurial discipline.

j)        Besides, some of the other important objectives of the EDPs are to:

k)      Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive for their realization.

l)        Prepare him / her to accept the uncertainty in running a business.

m)    Enable him / her to take decisions.

n)      Enable to communicate clearly and effectively.

o)      Develop a broad vision about the business.

p)      Make him subscribe to the industrial democracy.

q)      Develop passion for integrity and honesty.

r)       Make him learn compliance with law.


Also Read:
4. Entrepreneurship Development Programme (EDPs)
Also Read (Dibrugarh University)


Need and Importance of EDP

Importance of entrepreneurship development Programme (EDP) is to enable entrepreneurs initiating and sustaining the process of economic development in the following ways:

1.Creation of Employment Opportunities: 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 his enterprise. Entrepreneur mobilizes idle savings of the public and put them to productive use. In this way he helps in capital formation, which is so essential for the industrial and economic development of a country. Various development banks like ICICI, IFCI, IDBI; SFCs, SIDCs take initiative in promoting entrepreneurship through assistance to various agencies involved in EDP and by providing financial assistance to new entrepreneurs.

3.Balanced Regional Development: Small scale units can be set up in industrially backward and remote areas with limited financial resources. Successful EDP’s assisted in accelerating the pace of industrialization in the backward areas and reduces the concentration of economic power in the hands of a few. Setting up of more units leads to more development of backward areas and balanced regional development.

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. Effective EDPs can help in the proper use of local resources by providing guidance, assistance, education and training to the prospective entrepreneurs.

5.Improvement in per Capital Income: Entrepreneurs are always on the 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. More enterprises will lead to more production, employment and generation of wealth in the form of goods and services. It will result in the increase in the overall productivity and per capita income in the country. EDPs play a positive role in the setting of more units and thus help in generation of more employment and income.

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. This enable them to ensure easy availability of better quality products at lower prices to the consumers which result in the improvement in the standard of living of the people.

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. Through sale of their surplus products in foreign market entrepreneurs enable a country to earn foreign exchange, which is so essential for meeting developmental needs of the economy. Export promotion and import substitution thus help in promoting economic independence of the economy.

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. EDPs can help in preventing spread of industrial slums by providing various incentives, subsidies and infrastructural support to entrepreneurs for setting up their enterprises in industrially backward areas. This will also help in reducing pollution and overtaxing of civic amenities.

9. Helps in searching and exploiting opportunities: There are many opportunities for entrepreneurs in various fields like-Electronics, medicine, engineering, agriculture, food technology and packing, communication etc. EDPs help in searching such opportunities and provide necessary information, guidance and assistance in the search and exploiting these opportunities.

10. Enhancing managerial abilities: Entrepreneur development programmes help the entrepreneurs to enhance their organizing and managerial abilities so that they can run their enterprise efficiently and successfully. This is done through organizing educational, management, training and orientation programmes. Various specialized agencies like National Institute for Entrepreneurship and small Business Development(NIESBUD),New Delhi and Entrepreneurship Development Institute of India(EDII), Ahmadabad are engaged in entrepreneurship programmes.


Also Read:
4. Entrepreneurship Development Programme (EDPs)
Also Read (Dibrugarh University)


Weakness and Problems of entrepreneurship development programmes (EDPs) in India

1. 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.

2. Problems at the Pre training Phase. Various problems faced in this phase are — identification of business opportunities, finding & locating target group, selection of trainee & trainers etc.

3. 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.

4. 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. Thus the very objective to develop and strengthen entrepreneurial qualities and motivation is defeated.

5. 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.

6. 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 programmes.

7. Mode of Selection. There is no uniform procedure adopted by various agencies for the identification of prospective entrepreneurs. Organisations 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.

8. Non Availability of Competent Faculty. Firstly 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.

9. 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 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.

Skill development Programme

Skill development and vocational training programs are conceptualized, executed and monitored by various organizations, working closely with the government of India. There are various plans and schemes that are dedicated to achieve scalable skilling with quality and higher productivity, particularly in the unorganized  or informal sector which accounts for  83% of India’s workforce. The Ministry of Skill Development and Entrepreneurship (MSDE) is responsible for the co-ordination of overall skill development efforts across the country, building the vocational and technical training framework, skill up-gradation, building of new skills, and innovative thinking not only for existing jobs but also jobs that are to be created.