Solution:

Selection of Potential Entrepreneurs:

• The first step in the EDP is the proper identification and selection of potential entrepreneurs. Selection and training of an unsuitable person to go into an independent business is a national waste as well as harmful to the person concerned.

• His failure in business would result in a loss of prestige, or social standing and a setback in life. Therefore, utmost care should be given to their family background, entrepreneurial skills, and suitability to the trade chosen.

The selection of potential entrepreneurs has two essential components;

• (A) identification of entrepreneurial traits in the potential entrepreneurs

• (B) identification of suitable and viable projects for each identified entrepreneur.

A) Identifying Entrepreneurial Traits:

• Every participant must have a minimum level of eligibility for developing into an entrepreneur.

• Entrepreneurial traits include socio-personal and human sources characteristics.

A brief description of these characteristics is given below:

(i) Caste and family background:

• Caste and family background help create an entrepreneurial environment and occupational awareness for the entrepreneurs.

• Certain castes are traditionally involved in certain types of work. Matching castes with trades, therefore, appears to be logical. Most people prefer to accept familiar tasks easily.

  (ii) Age and Education:

• Research has revealed that younger people are more successful entrepreneurs. This may be because older people are more reluctant to take on risky ventures.

• They are more concerned with avoiding failure than achieving success. A minimum level of education is essential to perform functions like meeting officials, etc.

(iii) Size and type of family:

• The size of the family and the entrepreneur’s status in the family are important. A small entrepreneur has generally to depend upon family members as he cannot afford to hire workers. In a large family, the entrepreneur may command little authority.

• But other earning members of the family may enable him to pay undivided attention to his enterprise by providing financial support to the family.

• A joint family has generally a greater risk-bearing capacity. But the entrepreneur has greater command over the family resources in a nuclear family.

(iv) Social participation:

• This determines the amount of influence the the entrepreneur will be able to muster outside his immediate family circle. Greater social participation improves the ability to influence and thereby the success of the entrepreneur.

(v) Achievement-motivation:

• It is the urge to improve one-self about a goal. It includes both personal achievement and social achievement. It is the basis of entrepreneurship as entrepreneurs with a high need for achievement succeed better.

(vi) Risk-taking willingness:

• It refers to seeking a challenge in one’s activity. Two persons may view the same venture as involving different degrees of risk. If both of them go for the same venture, it means that the person perceiving a greater amount of risk in the venture has a higher risk-taking willingness.

(vii) Personal efficacy:

• It has been defined as the general sense of adequacy in a person. An individual tends to accept success or failure which are within his control.

• Personal efficacy is an important factor contributing to the entrepreneurial behavior of a person. It represents the potential effectiveness present at the inner level.

B) Identification of Enterprise:

• Once an entrepreneur has the necessary socio-personal and human resource characteristics identified, it is necessary to identify a suitable enterprise or project for him.

• The enterprise must be matched with the potential entrepreneur. All the background information like his skills, experience in the field, the physical resources available, family occupation, etc. should be taken into consideration.

• Having found a suitable trade an entrepreneur needs to thoroughly examine its viability in terms of financial implications.

• The raw materials availability, the marketing avenues, and profitability of the enterprise have to be explored. It would also involve a detailed ‘exploration of services needed and available in the area.