Entrepeneurial Management (EM 02) - entrepreneurship development

Management02 – Entrepreneurship Development

Suhas Dutta

Some basics about this course

• 3 track program

• Scoring done byYOU and I

• 30 hours in all

• Business plan development from the start

• Google group will form the basis of our communication beyondthe classroom

• 75% attendance mandatory

Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.3

Sir Richard Bransonon Entrepreneurship, and Business Plans

E:/VIDEO/BMA/Interview the Richard Branson business plan.mp4

E:/VIDEO/BMA/Interview the Richard Branson business plan.mp4

Syllabus coverage

• Entrepreneurship Development and Program

• Need for Entrepreneurship Development

• Problems

• National and State Level Institutions


Learning objectives

• At the end of this session, you will be able to describe:oThe various approaches to entrepreneurial developmentoEnumerate the parts of an appropriate curriculumoThe various elements of an entrepreneurial environmentoThe process and constituents of entrepreneurial developmentoThe objectives and methods of entrepreneurial trainingoInstitutions which help entrepreneurs


Entrepreneurial Environment


Approaches to Entrepreneurial Development

• Most governments in developing countries appreciate the needfor small and medium industries; playing a role in socio-economic upliftment; Thus, there is a growing interest in EDPs.

• Most common approaches to EDPs revolve around training. Themajor approaches are:oCourse content arranged by analysing needs and outcomesoBy choosing appropriate training methodsoConsidering subject area, nature of learning, demographic, trainers and

resourcesoAchieve training objectives


Approaches to Entrepreneurial Development


Business Education

Craft, Design & Technology

Civics

Sports

Maths, Language, Drama, Music etc

IT

Economics

Personal & Social skills

Entrepreneurship

Pathways to integrate Entrepreneurship Development into curriculum

The entrepreneurial environment

• The entrepreneurial environment refers to various facets withinwhich and enterprise must operate


Economic

Political

Social

Legal

Technological

Cultural

Entrepreneurial

Environment

• Private Enterprise & Development• Entrepreneurial Urge• Significance of Entrepreneurial Environment• Infrastructural Network• Environmental Analysis• Eco awareness• Instrumental Synergy• Training• Craftsmen / Artisanal development

Private enterprise and development

• Economic uncertainty and related risk

• Ecological pressure

• Need for efficient usage of resources

• Need for eco system which is supportive

• In some cases failure protection for thecommon cause and greater good

• Subsidies, and allowing inefficiencies (tosupport social causes) have long termadverse effects


Entrepreneurial urge

• Entrepreneurship may be lacking in areas ofpoverty, illiteracy and ignorance.

• Motivation to strive out of backwardness isimportant.

• Entrepreneurship grows where:o People are able to provide a creative response to a need

or a problem.

o The environment provides encouragement to suchcreative responses

o Clear visibility for economic benefits is present

o The eco-system provides a symbiotic relationshipamong entrepreneurs


Significance of entrepreneurial environment

• An enterprise, finally has tobe planned and operatedunder the limitations andsupport provided by:oGovernmental policiesoVarious regulations andoThe political environment


EnterpriseEntrepreneurial

PlansPolitical environment

Regulations

Policies

Infrastructural network

• In traditional economies agriculture forms the base of theeconomy and drives it.

• Modern economies are different


Traditional Economy

Economy DriverPrimary SectorAgriculture

Secondary SectorManufacturing

Tertiary SectorServices

Modern Economies

Any combination•Agriculture not necessarily dominant•Powerful manufacturing• Leading services

Infrastructural network

• If agriculture does not drive the economy enough, nucleusindustries can be set up


Environmental analysis

• Entrepreneurial development can be done only by carefulplanning taking into accountoTarget groups of beneficiariesoTheir activities, needsoPractical methods by which their needs and activities can linked to the

covering enterprise

• Area studies, unfortunately, often miss out specificsoAnd often get out of sync with the required objectives


Ecological concerns

Three important Govt. of Indialegislations were passed toensure the compliance ofpollution control standards:

• Water (prevention and control ofpollution) Act, 1974 and relatedamendments.

• Air (prevention and control ofpollution) Act, 1981 and relatedamendments.

• Environment (protection) Act, 1986


Instrumental synergy

• Comprehensive coverage ofdynamic needs can not beensured unless thedevelopment strategy takesinto accountoSocial NeedsoPrivate needs of the entrepreneuroAn integrated approach to rural

industrialization which deals with acomplex structure of differentialneeds and calls for synergybetween institutions


Social Needs

Personal Needs

Integrated synergistic approach

Training

• This forms the backdrop for development of training in thebackward areas.

• The entrepreneurship development program must dealwith:oEntrepreneurial activities identified and projects formulated on the

basis of action plans based on environmental analysisoFor each activity, institutional linkages to be spelled outoInter agency teams to be constituted on basis of institutional

linkagesoTraining programs should take entrepreneurs through multi-

disciplinary familiarization courseoNodal agency which organizes the training program to monitor

implementation of each trainee’s project


Craftsperson and artisanal development

• The integrated approach to rural industrialization needsorganized development of artisans.

• But, this development will be hindered with problems:oGeographically scatteredoVaried economic / social problemsoVery low productivityoGrade of products might not be acceptableoInput supply system is undependableoRestricted marketoMight not be able to attend training because of lack of affordability, and

stoppage of income


Craftsperson and artisanal development

• Thus needing a comprehensive support system to pull them intoentrepreneurship

• Strategy has to:oEstablish cooperative societies / agencies to provide dependable input

raw materialsoProvide preferential marketing supportoRestrict competition from big companies (??)oMake available technical and consultancy organizations


The process of entrepreneurial development


Meaning of EDP

• ED is important to achieve overall economic developmentthrough higher levels of industrial activity.

• Effective EDPs are designed to help individuals strengthen andfulfill their entrepreneurial motive by acquiring skills andcapabilities necessary for playing the entrepreneurial roleeffectively.

Understanding of motives

Understanding motivation

patterns

Impact on Behaviour

Impact on entrepreneurial

value

What EDP isn’t • Catch-all program to remove all

obstacles• Only training• Mechanism to satisfy long list of

objectives• Success depends only on the trainer /

mentor

Objectives of EDP


Help entrepreneurs to:

• Develop and strengthen entrepreneurial motivation

• Analyse environment related to small businesses

• Select projects and products

• Formulate projects

• Understand the process and procedure of setting up small enterprise

• Know and influence the source of support needed for launching theenterprise

• Acquire basic management skills

• Know and appreciate the pros and cons of being an entrepreneur

• Be aware of and appreciate the needed social responsibilitydisciplines

Evolution of EDPs

• Initial programs in the 1960s tried to fill technology and knowhow gapsoMainly as support programs for existing and new entrepreneurs

• Realization that for an enterprise to work, it is important forboth:oExternal facilities andoQualities of the entrepreneur

Need to be present


Entrepreneurial development cycle

• Entrepreneurial education

• Planned publicity

• Scientific identification of potentialentrepreneurs

• Help and guidance in selecting productsand projects

• Provision of technical know how

• Evolving locally suitable new productsand processes

• Creating entrepreneurship forums

• Recognition of entrepreneurial skills


Support

Sustaining

Simulatory


Support

Sustaining

Simulatory

• Registration of unit

• Arranging finance

• Providing land, utilities

• Guidance and support for machineryprocurement

• Supply of scarce raw materials

• Procuring licenses

• Providing common facilities

• Granting tax relief and other subsidies

• Offering management consultancy

• Helping marketing product

• Providing information



• Help modernisation

• Help diversification, expansion

• Additional financing for capacityutilisation

• Deferring repayment

• Diagnostic industrial extension

• Production units legislation /policychange

• Product reservation

• Quality testing

• Need based common facilities centre


Support

Sustaining

Simulatory

Non-Indian EDPs

• Commonly agreed that EDPsoProvide an alternative to traditional support structuresoTraining made positive contributions in the performance of entrepreneurs

• The basic features still are:oIdentification and careful selection of entrepreneurs for trainingoDeveloping the entrepreneurial capabilities of the traineeoEquipping the trainee with basic managerial and strategic competenciesoHelping to secure financial, infrastructural and related assistanceoProviding subsidized training


Issues with EDPs

• The impact of EDPs has been inconsistent at best. The basicissues to consider are:oStructure and composition of EDPsoAreas of operationoFixing prioritiesoLack of specialists supportoBesides many other operational issues including‐ Inherent inability to identify the needs of the institution

‐ Lack of consistent strategy

‐ Low local support

‐ Inadequate research facilities

‐ Inconsistent program design

‐ Lack of clarity in approach


Development of women entrepreneurs

• IDBI has relaxed norms for financing / refinancing for women ledenterprises

• Training institutions have been advised to keep in mindoPre-training conditionsoInclusion of women trainersoExtension services to be tuned to needs of women entrepreneursoInclusion of demonstrations and field visitsoPost training hand holding till entrepreneurs reach break-even stage


Strategy for entrepreneurial development• Public enterprises for areas where private enterprise is not attracted

• All effort towards an industrial culture

• Development of management education and industrial training

• Adequate measures for mobilizing and fostering entrepreneurial talent

• Programs for development of backward regions

• Effective administration to be made more effective so that objectives of economicpolicies may be fully achieved

• Institutional framework to be aligned with major industrial or economic needs

• Greater emphasis on research relating to processes and enhancement of value ofindigenous techniques

• Financial institutions to provide adequate and timely financial assistance to SMBs

• Conducive working and entrepreneurial environment for new categories and typesof entrepreneurs


Entrepreneurial development training

Importance of training

• Ensures availability of skilled workers at all levels

• Increase potential, and improve performance of workers

• Enables workers to work more efficiently, faster and precisely tomaintain quality of products

• Minimizes scrap, and defective products

• Minimizes accidents, reduces fatigue

• Reduces employee turnover, improves engagement and teamspirit

• Improves chances of career progression

Principles and methods of training

• In proper atmosphere, systematically through duly qualified andtrained instructors

• Reasonably long to cover theory and practical skills -comprehensive

• Training at all levels – induction, job, promotion, refresher


Individual Training Group Training Lectures Demonstrations

Written Instructions Conference Meetings / Workshops

Selection scheme


Selecting Area and

Survey

Introduction of EDP to

community

Revision of curriculum

Marketing the EDP course

Symposium

Participant Selection

EDP Training

Follow upPost-training

assistance

Pull from participants

Selected participants

Entrepreneurs

Course content and curriculum

• 25 day course

• Daily program of 2 sessions per day

• Motivational training – three dayresidential program


Motivation Training

Management

Essentials

Feasibility Study

Fundamentals

Introduction

to Entreprene-

urship

Plant Visit

Non-Indian approaches to training

• In Germany, the common features of re-structuring are:oBroad-based training followed by specializationoDevelopment of multi-craft skillsoDevelopment of unique training modules and unitsoIndustry’s lead and initiativeoChange in complexion of workforce – towards skilled workersoRetraining programs, for skill upgradationoOverall personality development of workforce

• In contrast training in Japan takes into accountoOn the job trainingoGaining of individual knowledge


Action oriented training


Promotion

Selection

On the job training on Tech.

subjects

On the job training on

business subjects

Group training on technical

subjects

Group training on managerial

subjects

Follow-up visits

EDP pre-requisites

• Entrepreneurs need variety of assistance at the beginning andEDPs should recognize the specific needs

• Survey of opportunities

• Entrepreneur selection

• Inputs for entrepreneurship development training


Support system – Government and non-government


Directorate of Industries

State & Cooperative

Banks

District Industrial Centres

Small Scale Industries Board

Ministry of Commerce &

Industry

Extension CentresRegional Branches

Prototype Centres

Central

Local

Voluntary Agencies

Linkage Agencies BanksNon Government

Institutions for entrepreneurs

Focus of EDPs

• Entrepreneurs can’t be created like degree holders

• Only those individuals who possess the basic capabilities forentering into business ventures

• Vary training inputs depending on region, sector and individuals

• Train the individuals to also run the enterprise successfully

• Focus on the person rather than on the project

Institutions

Management Development Institute(MDI)

• Was set up for developing andimproving the quality of day to daymanagement

• Involved in research and consultancy aswell

• Some programs run in Karnataka

National Institute for Entrepreneurshipand Small Business Development(NIESBUD)

• Apex body to co-ordinate thetraining programs of various centresand organizations.

• To train large number of trainers andmotivators

• To prepare model syllabuses oftraining for various target groups


Institutions

Entrepreneurship DevelopmentInstitute of India (EDII)

• Principal agency with socialresponsibility for entrepreneurshipdevelopment

• Developing relevant programs andinnovative training techniques fortrainers

• IDBI set up IEDs

• SIDBI

• STEPs

• The Centre for EntrepreneurshipDevelopment

• The Entrepreneurship MotivationCentre

• Xavier Institute of Social Service


Role of Banks

• Development BanksoSpecial capital and seed capital schemes

• Commercial BanksoSpecial and package schemes to develop entrepreneurship in small scale

industries sectoroVarious types of non-financial support


Further readings / viewings

• http://tnau.ac.in/eagri/eagri50/AECO341/lec02.pdf

• http://msme.gov.in/Web/Portal/New-Default.aspx

• http://www.dcmsme.gov.in/MSME-DO/sidonetwork.htm

• http://www.slideshare.net/arnav.dhankad/the-role-of-small-scale-industries-in-india


http://tnau.ac.in/eagri/eagri50/AECO341/lec02.pdf

http://msme.gov.in/Web/Portal/New-Default.aspx

http://www.dcmsme.gov.in/MSME-DO/sidonetwork.htm

http://www.slideshare.net/arnav.dhankad/the-role-of-small-scale-industries-in-india

Entrepeneurial Management (EM 02) - entrepreneurship development

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