Financial Daily from THE HINDU group of publications
Friday, Sep 17, 2004
Industry & Economy
Plans afoot to facilitate entrepreneurship
Ambar Singh Roy
Mr H.K. Mittal, Advisor & Head of NEB
Kolkata , Sept. 15
THE National Science & Technology Entrepreneurship Development Board (NEB), under the Department of Science & Technology of the Government of India, has firmed up plans to ensure that at least 100 entrepreneurship development cells (EDCs) are simultaneously operational across the country at any given point in time.
Currently, there are about 40 EDCs that are operational in different parts of the country, according to Mr H.K. Mittal, Advisor & Head of NEB.
Speaking to Business Line during a visit to Kolkata recently, Mr Mittal said the ramp up to 100 simultaneously operational EDCs would be achieved within the next three years.
The idea was to facilitate entrepreneurship in knowledge-based, technology-driven and emerging areas.
"Young people of today's generation are more aware about entrepreneurship, thanks to new-generation role models such as Mr Narayana Murthy, Mr Azim Premji and Mr Sabeer Bhatia, among others.
They are also encouraged by successful start-ups in new areas such as retail, business process outsourcing and design. Entrepreneurship is no longer taken up as a last resort. In fact, it is gradually becoming a preferred option," he said.
Stating that the costs of keeping manpower idle is very high, Mr Mittal said that the board was formed in 1982 to provide the necessary inputs to facilitate knowledge-based and technology-driven entrepreneurship.
As such, it has constantly devised ways that are aimed at engaging young people as entrepreneurs.
To begin with a three-day entrepreneurship awareness programme is being held in institutions for pre-final and final-year students. In the next step, a six-eight-week entrepreneurship development programme will be conducted under the aegis of various institutions that host EDCs.
All EDCs are attached to educational institutions. These EDCs are provided financial and other support for five years.
Thereafter, either they operate on a self-sustainable basis or are adopted by the host institution.
While the host institution provides the building in which an EDC is housed, NEB provides a one-time grant of Rs 5 lakh-Rs 7 lakh for the setting up of communication and laboratory facilities and installation of computers.
For the next five years, the board also gives EDC about Rs 8 lakh per year for meeting recurring and operational expenses.
This, however, is based upon its performance review. An EDC is expected to promote at least 10 entrepreneurs in the first year of its existence.
ccording to Mr Mittal, the better performing EDCs are upgraded to technology business incubators (TBIs). The setting up of each TBI entails an investment of Rs 5 crore, of which 50 per cent is contributed by the host institution. Each host institution specialises in a certain area.
For example, the TBI attached to the Indian Institute of Technology, Mumbai, facilitates entrepreneurship in areas such as information technology and electronics.
The TBI at the National Institute of Design in Ahmedabad focuses on design, while the one at the PSG College of Engineering, Coimbatore, is focussed on engineering. Currently, there are 15 TBIs across the country.
Till date, the board has facilitated the setting up of about 40,000 enterprises, including micro enterprises. On an average, each enterprise provides jobs to six people.
The success rate of these enterprises has been pegged at about 80 per cent in the case of trained entrepreneurs and 45 per cent in case of the untrained ones.
"It is clear that training helps in avoiding pitfalls," Mr Mittal said, adding that efficient management of working capital has posed a difficult problem for entrepreneurs.
The challenge now is to look beyond the stage of creating entrepreneurs and providing appropriate linkages to support systems such as infrastructure, legal and finance.
The focus now would be on setting in place an entrepreneurship development system that can match the aspirations of the entrepreneurs themselves.
The idea is to facilitate the creation of 5,000-6,000 new enterprises every year on a sustainable basis, according to Mr Mittal.
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