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Development of Human Capital
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DEVLOPMENT OF HUMAN CAPITAL
A CRYING NEED OF THE HOUR
By S R Pal

It is, in fact, needless to emphasize on the role of small-scale sector, in as much as this sector had been playing a vital role in many ways in fulfilling our socio-economic object. There is, perhaps, no denial of the fact that this sector has emerged as a powerful tool for not only even dispersal of economic wealth and power ensuring more balanced growth, but also for providing more employment opportunities per unit of capital investment. This phenomenon would be clear if we go through some relevant statistics. It is really encouraging to note that

  • about 5000 products are being manufactured in the small scale sector meeting directly the day-to-day needs of millions of our countrymen and also indirectly by supplying goods and services to a large number of medium and large scale industries.
  • about 12 million persons are estimated to have been provided employment by SIDO-units apart from about 6 lakhs of unregistered units.
  • more than 30% of the country’s total export comes from small  scale sector and
  • with only 6 to 7% of the fixed capital investment of all factories, small scale sector provides about 40% of the total employment in the factory sector.

And this is in brief, why the Governments, both at the Centre and the State, have been attaching great emphasis for growth and development of small-scale industries.

Now, so far as setting up and successful running of an industrial unit is concerned, we find through our experience that there are two factors acting on this account, one external factor what we may describe as the worldly situation, i.e. the required infrastructure for growth of a particular industry including availability of raw materials, appropriate technology, finance, market etc. which may again be termed as physical and financial capital and the other one is the internal factor i.e. the human-resource factor. In fact, this human capital factor appears to be the most strategic requirement, in absence of which, even in abundance of natural and physical resources, machinery and capital may go grossly underutilised or misused. There is a growing realisation that a rapid rate of human-capital formation is as important a pre-condition of economic growth as is the rapid rate of physical and financial capital formation. Thus, particularly in the developing countries like ours, one of the major tasks is to develop the human capital, since when the external resources are limited more stress has to be laid for developing the human capital for ensuring proper and successful utilisation of the existing resources. This process of development of human capital can be achieved through what we call EDP or Entrepreneurship Development Programme. This programme also aims at development of the entrepreneurial traits or characteristics through imparting proper training called Entrepreneurial Motivation Training (EMT) apart from its curriculum for enriching the knowledge level of the prospective entrepreneurs. It is, however, conceded that EMT reinforced EDP is likely to yield better results, in as much as, the EMT enhances the receptivity of the trainees concerned for internalisation of whatever knowledge inputs are provided to them through class lectures/field visits/video film-shows etc. Thus we see that the EDP has two mutually dependent and mutually rewarding components in it-the motivation part and knowledge input part.

Now, the psychological aspect of the entire programme aiming at development of the mental traits appears to be no less important, particularly, when we take a retrospect of this phenomenon. When we talk of growth of SSI in this region we often hear the popular remark that the Bengalee youths, particularly, belonging to middle class are more inclined to get a job than to take the challenging task of setting up an industry. If we analyse the situation we may find several reasons for this. One of the major factors may be social recognition of the small-scale entrepreneurs. It is really unfortunate that their social recognition is not to that extent what it should be. In fact, recognition comes from correct appreciation, which again comes from proper awareness. Perhaps due to lack of proper awareness, the actual role of the entrepreneurs in the total nation-building process is not being correctly appreciated, since we seldom think in terms of the socio-economic services rendered by the small-scale entrepreneurs towards the society. The social recognition will in turn create a social demand for attracting our youths to opt for this challenging task. If we go on further scanning of the existing situation leading to a general apathy amongst our youths towards opting for this entrepreneurial career, we will see that the entire system or process through which we grow-up in our homes and schools etc., is by and large, not congenial for manifestation of the entrepreneurial traits. The social environment, in general, be it of family or educational institution to which we are subjected leaves little scope of manifestation of the traits like innovativeness and creativity, leadership or initiative taking capacity, risk-tasking ability and in fine self-confidence. In fact, most of us from our very childhood have been allowed to do exactly whatever we were asked to do. By this way we may become a good worker but seldom a good entrepreneur.

Apart from the above, another factor, which stands in the way of choosing this career, is that there are still some myths or misconcepts or confusion prevailing in our society. For example, there is a common belief that entrepreneurs are born and people belonging to some communities having business background are generally believed to have in-born entrepreneurial qualities. Yes, it is not denied that those who take birth in such communities are definitely in advantageous position as they get the opportunity to be aware of the business environment more than others, but empirical studies suggest that emergence of entrepreneurs is independent of caste/religion. What is required is to generate certain entrepreneurial characteristics, most of which are psychological in nature and can be improved or influenced and thus manifested through proper thinking process and by the way of life, in general. It is generally conceded that the mental make up of a person can be changed through proper practise to confirm to specific requirement. And EDP, in particular, EMT, aims at giving this orientation which gradually enables a person, if he starts and practises thinking and doing in a specified direction, to gather the positive traits after gradual eradication of the weaknesses and barriers like fear, idleness, lack of confidence, shyness etc.

Some persons think that primary motivation of an entrepreneur is desire for wealth. But, here also the empirical studies suggest that ‘money’ is very rarely the primary driving force for the successful entrepreneurs. In fact, it is the high need for achievement or the urge of doing something of excellence, which acts as the primary driving force, money is not the incentive but a measure of its success. Rather, it is people with low need for achievement that requires money incentive to make them work harder. However, in the primary stages an entrepreneur may be interested in money rewards because of the feed back they give as to how well he is doing, but in the long run it is anything but money which ultimately drives him to rise to the top, in the event of which money automatically starts coming in. Another popular belief is that a very high order of risk is involved in establishing an enterprise, where fortune and chance also play a vital role. The usual meaning of the term ‘risk’ does not seem to be applicable in the context of entrepreneurial behaviour. Risk taking ability in case of an entrepreneur indicates a ‘challenge’ in his activity where there is reasonable chance of success. In fact, an entrepreneur’s strategy is to reduce the risk by anticipating the barriers, trying to foresee the problems and remaining open to the feedback, both positive and negative, in other words an entrepreneur is willing to take calculated risk for a venture that has reasonable chance of success. However, studies show that successful entrepreneurs avoid high-risk situation, rather they seek and take moderate risk.Some persons think that entrepreneurs are necessarily amoral, as if they sacrifice morals for profit. Analysis of the characters of the successful entrepreneurs suggests that entrepreneurs are generally deeply committed to what they consider to be worthwhile purposes and their need to achieve sometimes require flexibility with the rules, but not a loss of integrity. In fact, the ‘ethics’ issue is delicate and controversial. The entrepreneurs have their own standard of ethics. They tend to process what we may refer to as ‘situational ethics’. The glaring example of this concept of situational ethics is perhaps the teachings of Lord Sri Krishna when we hear him to convince Arjuna as to why he should hold arms even against Bhisma or Dronacharya. This concept of situational ethics is further elucidaied when we go through the valued comments of Swami Vivekananda while explaining the concept of ‘work without motive', at the 42nd meeting of the Ramkrishna Mission held at Calcutta on 20.3.1898 and also his comments on ‘Karma Yoga’. As he told, there cannot be any action, which is perfectly pure, or any, which is perfectly impure taking purity or impurity in the sense of injury or non-injury. The result of every work is mixed with good and evil and thus we should engage in such work, which bring the highest amount of good and smallest measure of evil. In the entrepreneurial world, not to be confused with situational ethics, integrity and reliability are no doubt a must for an aspiring entrepreneur not only for raising his capital and debt financing but also his personal values has a profound effect on development of the team and the business itself.If we sum-up, the fact remains that without development of the human capital, the desired success can not be achieved, for which, however, the social recognition of the small scale entrepreneurs to the desired extent based on entrepreneurial awareness of the society is also deemed essential. It would also help us reaching the target if suitable orientation course is introduced at a certain stage in the educational institutions. The course should be so designed that it is conducive to manifestation/development of the entrepreneurial traits from the very student hood. In this connection it would, perhaps, not be irrelevant to mention that acquiring these so called entrepreneurial traits will not only create successful entrepreneurs, but also future citizens of our motherland having acquired all these qualities will surely prove themselves worthy in whatever career of field they may be working in future.

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