Promotional Agencies, Entrepreneurship Development II Notes

Entrepreneurship Development II

Unit – I: Promotional Agencies

Types of Entrepreneurial Development Promotional Agencies and their ideology (Objectives)

Promotional agencies are agencies that are set up to help or assist entrepreneurs to start their enterprise. They basically promote the business through various strategies so that the entrepreneur can survive the initial hiccups any business faces. Also, most of the strategies the promotional agencies use are all tried and tested methods and hence ensure to benefit the entrepreneurs.

Entrepreneurship development is important for any national economy to grow and boom. Hence the government has set up many agencies to help, promote, train and support entrepreneurs. They also impart training to entrepreneurs to improve their business and market knowledge, to develop their skill set and build a businessman attitude.

The various promotional agencies set up by the central government include:-

Small industries development organization (SIDO)
Management development institution (MDI)
Entrepreneurship development institute of India (EDI)
All India small scale industries board (AISSIB)
National Institution of Entrepreneurship and small business development (NIESBUD)
National Institute of Small Industries Extension Training
National Small Industries Corporation Limited (NSIC)

1. Small industries development organization (SIDO)

SIDO was established in October 1973 now under Ministry of Trade, Industry and Marketing. SIDO is an apex body at Central level for formulating policy for the development of Small Scale Industries in the country, headed by the Additional Secretary & Development Commissioner (Small Scale Industries) under Ministry of Small Scale Industries Govt. of India. SIDO is playing a very constructive role for strengthening this vital sector, which has proved to be one of the strong pillars of the economy of the country. SIDO also provides extended support through Comprehensive plan for promotion of rural entrepreneurship.

The main functions and objectives performed by the SIDO in each of its three categories of functions are:

Functions Relating to Co-ordination:

To evolve a national policy for the development of small-scale industries,
To co-ordinate the policies and programmes of various State Governments,
To maintain a proper liaison with the related Central Ministries, Planning Commission, State Governments, Financial Institutions etc., and
To co-ordinate the programmes for the development of industrial estates.

Functions Relating to Industrial Development:

To reserve items for production by small-scale industries,
To collect data on consumer items imported and then, encourage the setting of industrial units to produce these items by giving coordinated assistance,
To render required support for the development of ancillary units, and
To encourage small-scale industries to actively participate in Government Stores Purchase Program by giving them necessary guidance, market advice, and assistance.

Function Relating to Extension:

To make provision to technical services for improving technical process, production planning, selecting appropriate machinery, and preparing factory lay-out and design,
To provide consultancy and training services to strengthen the competitive ability of small-scale industries.
To render marketing assistance to small-scale industries to effectively sell their products, and
To provide assistance in economic investigation and information to small- scale industries.

2. Management development Institute (MDI)

MDI is located at Gurgaon (Haryana).It was established in 1973 and is sponsored by Industrial Finance Corporation of India, with the objectives of improving managerial effectiveness in the industry. It also encourages professionalization in the management of the enterprises. It stands devoted to evolving model syllabi for training various target groups by effective training strategies, methodology, manuals and tools, facilitating and supporting Central/State governments and other agencies in executing programmes of entrepreneurship and small business development.

It also undertakes research studies in both micro and macro areas of economic and industrial development. Besides, giving training to Indian Administrative Services (IAS), Indian Foreign Services (IFS), Indian Economic Services (IES) officers and employees of major public sector undertakings like ONGC, SAIL, BHEL, IPCL etc. this institute also undertakes consultancy services and research projects in large complex organisations.

3. Entrepreneurship development institute of India (EDI)

Entrepreneurship Development Institute of India (EDI), an autonomous and not-for-profit institute, set up in 1983, is sponsored by apex financial institutions – the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and the State Bank of India (SBI). EDI has helped set up twelve state-level exclusive entrepreneurship development centres and institutes. One of the satisfying achievements, however, was taking entrepreneurship to a large number of schools, colleges, science and technology institutions and management schools in several states by including entrepreneurship inputs in their curricula.

In the international arena, efforts to develop entrepreneurship by way of sharing resources and organizing training programmes, have helped EDI earn accolades and support from the World Bank, Commonwealth Secretariat, UNIDO, ILO, British Council, Ford Foundation, European Union, ASEAN Secretariat and several other renowned agencies. EDI has also set up Entrepreneurship Development Centre at Cambodia, Lao PDR, Myanmar and Vietnam and is in the process of setting up such centres at Uzbekistan and five African countries.

4. All India Small Scale Industries Board (AISSIB)

The Small Scale Industries Board (SSI Board) is the apex advisory body constituted to render advice to the Government on all issues pertaining to the small scale sector. It determines the policies and programmes for the development of small industries with a Central Government Minister as its president and the representatives of various organization i.e. Central Government, State Government, National Small Industries Corporations, State Financial Corporation, Reserve Bank of India, State Bank of India, Indian Small Industries Board, Non-government members such as Public Service Commission, Trade and Industries Members.

5. National Institution of Entrepreneurship and Small Business Development (NIESBUD), New Delhi

It was established in 1983 by the Government of India. It is an apex body to supervise the activities of various agencies in the entrepreneurial development programmes. It is a society under Government of India Society Act of 1860.The major objectives of institute are:

i) To make effective strategies and methods

ii) To standardize model syllabus for training

iii) To develop training aids, tools and manuals

iv) To conduct workshops, seminars and conferences.

v) To evaluate the benefits of EDPs and promote the process of Entrepreneurial Development.

vi) To help support government and other agencies in executing entrepreneur development programmes.

vii) To undertake research and development in the field of EDPs.

6. National Institute of Small Industries Extension Training

It was established in 1960 with its headquarters at Hyderabad. The main objectives of national Institute of Small Industries Extension Training are:

i) Directing and Coordinating syllabi for training of small entrepreneurs.

ii) Advising managerial and technical aspects.

iii) Organizing seminars for small entrepreneurs and managers.

iv) Providing services regarding research and documentation.

7. National Small Industries Corporation Ltd. (NSIC)

The NSIC was established in 1995 by the Central Government with the objective of assisting the small industries in the Government purchase programmes. The corporation provides a vast-market for the products of small industries through its marketing network. It also assists the small units in exporting their products in foreign countries. Objectives of NSIC:

To enhance reach of the Corporation resulting in growth in its business.
To achieve operational efficiency and self-sustenance by attaining better productivity and profitability.
To upgrade the professional skills of all employees keeping in pace with business needs.
To provide safe, clean, hygienic & congenial work environment for effective contribution by every employee.
To provide training for skill upgradation of trainees leading to opportunities for their employment/self-employment
To provide common facility services to industries for enhancing their competitiveness and quality.

Entrepreneurship development is very important and hence governments spend a lot of money to extend their support for the same. They also encourage entrepreneurs in rural and backward areas to ensure regional development. They set up various programs to help entrepreneurs in the field of marketing, finance, technique and skill development to help entrepreneurs to accelerate and adapt to changing industry trends. Apart from the above stated the main objective of promotional agencies includes:

Establishment: Promotional agencies help entrepreneurs to set up and establish their business.
Funding: Promotional agencies help businesses to get the necessary funds or investment to help establish their venture. Financial assistance is essential for any business to get established and the agencies help in the same.
Market research and availability: Promotional agencies via their market research programs can help new entrepreneurs to gain control over the changing market trends. This is very important especially during the initial stages.
Market trends: Promotional agencies through their network and experience can help new-age entrepreneurs to get full knowledge about the latest market trends and ever-growing demand for better products and services.

Comparison of Governmental vs Non-governmental Agencies on the basis of strength and weakness

There is no denying of the fact that development of entrepreneurship has emerged as a national movement due to its strengths to solve the twin problems of unemployment and poverty. In fact, the need for development of ‘spirit of enterprise’ among the target population intensified more during the nineties with the failure of the ‘trickle down theory’ to percolate the development benefits to the masses at grass-root level.

It is against this backdrop, several self- employment and anti-poverty programmes like PMRY, TRYSEM etc., involving some entrepreneurial qualities were introduced by the government as a tool of bottom up mode of development. However, these programmes executed by the Government agencies proved ineffective due to their weaknesses of one type or other.

Such a situation necessitated the NGOs to come out of their traditional bounds like health, sanitation, education, family planning, environment protection, etc., to join a noble mission to entrepreneurs the lesser known target groups (Singh 1992). The government agencies engaged in this activity strengthened the NGOs by co-opting and collaborating with them to reach the lower rungs of the society.

Today, we have several NGOs contributing to entrepreneurship development in the country. The major ones are National Alliance of Young Entrepreneurs (NAYE), World Assembly of Small and Medium Entrepreneurs (WASME), Xavier institute for Social Studies (XISS), SEWA of Ahmedabad, ‘Y’ Self-Employment of Calcutta, AWAKE (Association of Women Entrepreneurs of Karnataka), and Rural Development and Self-Employment Training Institute (RUDSETIs) based in Karnataka.

Governmental Vs Non-Governmental Agencies

Governmental Agencies

Non-Governmental Agencies

a. Governmental agencies support is limited mainly to the people having political contacts.

b. Lack of flexibility in operation because of governmental rules and regulations.

c. These agencies lack nearness to client groups due to which they are less sensitive to community need.

d. Stimulating and mobilizing interest in the community.

e. Dependence on government satisfaction.

f. Pro-business approach and proper integration of entrepreneurship development work.

g. Adequate opportunities and supports from government.

h. Government agencies are fully equipped and financed to take up EDP activities.

a. These agencies aim at reaching the poor and needy people of the society.

b. Flexibility and responsiveness in operation to invent appropriate solution.

c. Nearness to client groups made them to be sensitive to community need.

d. Stimulating and mobilizing interest in the community.

e. Dependence on customer satisfaction.

f. Anti-business philosophy, lack of programme integration due to lack of proper understanding of entrepreneurship approach.

g. Inadequate opportunities to work as trainer/motivator.

h. Not all NGOs are ready and equipped to take up this activity.

In spite of these so-called weaknesses, the role of Governmental and Non-Governmental Agencies in entrepreneurship development cannot be undermined. Evidences are galore to mention that a few NGOs in India have succeeded largely in imparting entrepreneurial skills among the weaker sections of the society.

Entrepreneurship Development II Chapterwise Notes