Entrepreneurship Development: The Indian Case

Abstract

The momentum that the Entrepreneurship Development (E D) movement has gained in India attests to the power of the belief that individuals can be developed, their outlook changed, and their ideas converted into functioning business enterprises. The present note covers the Indian Entrepreneurship Development Strategy, its policy implications, and its possible implications for other countries. People in any region possess many economic strengths, but often fail to convert them into opportunities. Apart from possible policy barriers, the inability to translate ideas into action is largely attributable to a lack of self-confidence. That the requisite confidence can be built and nutured, at least in selected individuals, is the basic premise of the Indian experiment. The Indian Model The possibility of establishing a mechanism to develop entrepreneurs may have originated from the encouraging results of an innovative scheme of financing new entrepreneurs, begun in 1968, that relied on the competence of the individual and the viability of the proposed project rather than on the more conventionally applied criteria relating to the applicant's financial background. Under this scheme, a wide variety of projects were established by entrepreneurs from non-business communities and castes. The success of this program suggested existence of a vast entrepreneurial potential in hitherto untapped segments of the population. The Entrepreneurship Development Program (EDP) was formulated as a package of training and counseling designed to encourage entrepreneurship throughout the Indian populace. The program consists of three stages: (1) selection, (2) training, and (3) follow-up. The selection criteria include individual scores on: need for achievement (n Ach), capacity for risk-taking, positive self-concept, problem-solving abilities, and drive for autonomy. The training program is capable of being tailored to the specific requirements of each target group. Outside support is mobilized from among university faculty members, governmental agencies, and private sector business practitioners. Field trips, in-plant training, and market intelligence are part of the program. The three main categories of training input are: (1) behavioral inputs focusing on achievement motivation; (2) business opportunity guidance; and (3) management skills. In the follow-up stage, the trainer-motivator remains involved in the implementation of the entrepreneur's business idea. The duration of the ED has varied in the past from fifteen to ninety days, depending upon the needs of the target groups. But a standard model of six weeks full-time (about 150 hours) for beginners or 90 days part-time for trainees with some previous experience seems to be the emerging trend. The cost per trainee varies from Rs.3000 to Rs.4000 (U.S. $1 = Rs. 13.00). On an average, 60 percent of the trainees of the Entrepreneurship Development Institute of India (EDII) do set up their own enterprises. Costs of EDPs Most EDPs in India are state-sponsored, causing some to question the wisdom of reliance on public agencies for the subsidies required for the conduct of EDPS. The Development Bank's advocacy of extending training services at no cost has also been questioned. …

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