What is Entrepreneurship Development Programme?
EDP is a program meant to develop entrepreneurial abilities among the people. In other words, it refers to the inculcation, development, and polishing of entrepreneurial skills into a person needed to establish and successfully run his / her enterprise. Entrepreneurship plays a very important role in economic development.
Entrepreneurs act as catalytic agents in the process of industrialization and economic growth. Joseph Schumpeter states that the rate of economic progress of a nation depends upon its rate of innovation which in turn depends upon the distribution of entrepreneurial talent in the population.
Technological progress alone cannot lead to economic development unless technological breakthroughs are put to economic use by entrepreneurs. It is the entrepreneur who organizes and puts to use capital, labor, and technology in the best possible manner for the setting up of his enterprise.
Importance of Entrepreneurship Development Programme
The importance of entrepreneurship development programme (EDP) is to enable entrepreneurs to initiate and sustain the process of economic development in the following ways:
- Creation of Employment Opportunities
- Capital Formation
- Balanced Regional Development
- Use of Local Resources
- Improvement in Per-Capital Income
- Improvement in Standard of Living
- Economic Independence
- Preventing Industrial Slums
- Reducing Social Tension
- Facilitating Overall Development
Creation of Employment Opportunities
Unemployment is one of the most important problems confronting developing and underdevelopment countries, EDPs enable prospective entrepreneurs the set up 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.
Entrepreneurs in this way get an opportunity to lead an independent and honorable life and at the same time, they enable others to get gainful employment. Several schemes like Nehru Rozgar Yojna, National Rural Employment Programme (NREP), Integrated Rural Development Programme (IRDP), etc. have been initiated by the government, of India in this direction.
The thrust of all these schemes is to eliminate poverty and generate gainful employment opportunities for the unemployed. Thus entrepreneurs can play an effective role in reducing the problem of unemployment.
It is not possible to set up an enterprise without adequate funds. An 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, and SIDCs take the initiative in promoting entrepreneurship through assistance to various agencies involved in EDP and by providing financial assistance to new entrepreneurs.
Balanced Regional Development
Small-scale units can be set up in industrially backward and remote areas with limited financial resources. Successful EDPs 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.
The success stories of entrepreneurs set the right example for others to follow and this accelerates the pace of industrialization in the backward areas. Setting up of more units leads to more development of backward areas and balanced regional development.
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 a lower cost. Alert entrepreneurs seize the opportunity and exploit it in the best interests of the area and industry.
Effective EDPs can help in the proper use of local resources by providing guidance, assistance, education, and training to prospective entrepreneurs.
Improvement in Per-Capital Income
Entrepreneurs are always on the lookout for opportunities. They explore and exploit the opportunities. Entrepreneurs take the 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 an 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 the generation of more employment and income.
Improvement in Standard of Living
Entrepreneurs by adopting the latest innovations help in the production of a 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 enables them to ensure easy availability of better quality products at lower prices to the consumers which results in the improvement in the standard of living of the people. EDPs provide the necessary support to entrepreneurs by educating them about the latest innovations and market trends.
Entrepreneurs enable a country to produce a wide variety of better quality goods & services and that too at competitive prices. They develop substitutes for 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 the sale of their surplus products in foreign markets entrepreneurs enable a country to earn foreign exchange, which is essential for meeting the developmental needs of the economy. Export promotion and import substitution thus help in promoting the economic independence of the economy.
Preventing Industrial Slums
Industrially developed areas are faced with the problem of industrial slums, which result in overburdening 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 prevent the 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.
Reducing Social Tension
Unemployment amongst 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.
EDPs can help channel the talent of this section of society in the right direction by providing proper guidance, training, and assistance for setting up their enterprises. This results in the generation of self-employment and the prevention of social tension, unrest, etc.
Facilitating Overall Development
An entrepreneur acts as a catalytic agent for change which results in a chain reaction. With the setting up of an enterprise, the process of industrialization is set in motion. This unit will generate demand for various types of inputs required by it and there will be so many other units that will require the output of this unit.
This leads to the overall development of an area due to an increase in demand and the setting up of more and more units there. Moreover, the success of one entrepreneur sets the right type of example for others to follow. Entrepreneurs, thus, create an environment of enthusiasm and convey a sense of purpose. This gives future impetus to the overall development of that area.
FAQs Related to the Importance of Entrepreneurship Development Programme
What is the importance of entrepreneurship development programme?
The following is the importance of entrepreneurship development programme:
1. Creation of Employment Opportunities
2. Capital Formation
3. Balanced Regional Development
4. Use of Local Resources
5. Improvement in Per-Capital Income
6. Improvement in Standard of Living
7. Economic Independence
8. Preventing Industrial Slums
9. Reducing Social Tension
10. Facilitating Overall Development.