A European Commission Entrepreneurship action plan based Action profile for Bangladesh

8/14/2019 A European Commission Entrepreneurship action plan based Action profile for Bangladesh

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Report on the implementation of

the Entrepreneurship Action Plan


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A European Commission Entrepreneurship action planbased Action profile for Bangladesh

Course Name: Entrepreneurship DevelopmentCourse code no. BA-305

Submitted To:

Mr. Nur Alam

Assistant professor

Business Administration Discipline

Khulna University

Submitted By:

MD. Atoa Rabbi ID No. 050309

MD. Azharul Islam ID No. 050316

Sabuz Saha Rony ID No. 050344

MD. Noor Hossain ID No. 050348

MD. Kamrul Hasan Noor ID No. 050350

Deb Prosad Roy ID No. 040338

3rd

year 1st

term

Business Administration DisciplineKhulna University

15.01.2008


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January 15, 2008

Mr. Nur Alam

Assistant Professor

Business Administration Discipline

Khulna University

Dear Sir:

Subject: Submission of a report.

With due regards and respect we state that we are very thankful to you as you assigned us

this report on An Eouropean Commission Entrepreneurship action plan based Action

profile for Bangladesh. It is a great opportunity for us to acquire theoretical and practical

knowledge about entrepreneurship and implementation of entrepreneurship action plan on

the Bangladesh perspective. We have tried out best to gather what we believe to be the most

complete information available.

Your kind acceptance and any type of appreciation would surely inspire us. We would

always be available and ready to explain further any of the context of the whenever asked.

Sincerely yours,

..........................................

MD. Atoa Rabbi ID: 050309

..........................................

MD. Azharul Islam ID: 050316

..

Sabuz Saha Rony ID: 050344

..........................................

MD. Noor Hossain ID: 050348

.........................................

MD. Kamrul Hasan Noor ID: 050350

.

Deb Prosad Roy ID: 040338

II


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Acknowledgement

In any comprehensive work, like this, credit must go to the multitude of people. We are still

students and just novice. Hence, we have taken help from different people for preparing our

report. Now here is a petite effort to show our deep graduate to those helpful people.

First, we commit ourselves grateful to Allah for his unlimited kindness and maximum

helpful hand in continuing our report preparation.

We express our sincere gratitude to our honorable course teacher, Mr. Nur Alam,

Assistant Professor, Business Administration Discipline, Khulna University, Khulna, for his

guidance and valuable remark about the convention of the report.

III


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TABLE OF CONTENTENTS

Foreword ............................................................................. ....................................... ......... II

Preface .............................................................................................................................. III

Executive Summary ...................................... ........................................... ......................... VI

Chapter 1: Introduction

1.1: Background of the Study ............................................................................ 8

1.2: Rational of the Study .................................................................................. 8

1.3: Objective of the Study ................................................................................ 8

1.4: Scope of the Study ...................................................................................... 9

1.5: Limitations of the Study ............................................................................. 9

1.6: Methods .................................................................................................... 10

1.7: Report Preview ......................................................................................... 10

Chapter 2: Entrepreneurship

2.1: Entrepreneurship ...................................................................................... 12

2.2: Entrepreneurship condition in Bangladesh .......................................... 12

Chapter 3: The implementation of entrepreneurship action plan

3.1: Significant achievement ........................................................................... 14

3.2: More about the result ................................................................................ 16

Chapter 4: Strategic Area One: Fuelling entrepreneurial mindsets and practice

4.1: Fostering entrepreneurial mindsets through stimulatory activities .......... 18

Chapter 5: Strategic Area Two: Encouraging more people to become entrepreneurs

5.1: Reducing the stigma of business failure ................................................... 20

5.2: Facilitating the transfer of businesses ...................................................... 20

5.3: Improving social security of small business owners ................................ 20

Chapter 6: Strategic Area Three: Gearing entrepreneurs for growth &

competitiveness6.1: Tailor-made support for women and ethnic minorities ............................ 22

6.2: Facilitating SMEs business co-operation in the internal market ............. 24

6.3: Fostering innovative clusters .................................................................... 24

Chapter 7: Strategic Area Four: Improving the flow of finance

7.1: More equity and stronger balance sheets .................................................. 26


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Chapter 8: Strategic Area Five: Creating a more SME-friendly regulatory and

administrative framework

8.1: Listening to SMEs .................................................................................... 28

BIBLIOGRAPHY ......................................................................................


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EXECUTIVE SUMMARY

This report is a pathway to move from the entrepreneurial events of Bangladesh that

happened by do not five years ago and that focus on upcoming after five years. The

first past briefly deposit the entrepreneurship events of lest five years. The success

and impacts of entrepreneurship on our economy. Later past focus on key action area

for the successful entrepreneurial status in the country.

VI


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CHAPTER 1

INTRODUCTION


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1.1: Background of the Study

The practice of entrepreneurship reveals the entrepreneurs are performing well in their

ventures in different phases of the operation. The pioneering role of entrepreneurship in

changing an economy towards and development are well recognized in the economy. As a

part of BBA program, our Entrepreneurship Development course teacher Mr. Nur Alam

assigned us to prepare a report development a European commission entrepreneurship

action plan based action profile for Bangladesh. We have prepared our report on January 13,

2008 which will be submitted by January 14, 2008.

1.2 Rational of the study

We are 3rd year 1st semester students. After one and half year, we will be going to job

market and competing with other universities graduates for getting a suitable job. For

getting an expected job, we need to concern about job market condition from today. We

have to come forward with energetic, determined and innovative idea. Our academic

program prepares us as an innovative person who will always comes with new idea,

revolutionary thought that motivate us to introduce a new venture. We focus on expected

job that is not mean about work under others. We focus on our creativity. After graduation

we all the BBA graduate come with a new venture. But we have to know the government

policy on the entrepreneurship action plan and other supportive condition. That make easier

to create an amazing venture.

1.3: Objective of the Study

We have prepared this report based on two purposes. That are-

1.3.1Primary Objective:The report aims to provide information on the implementation of the entrepreneurship

action plan in Bangladesh.

1.3.2 Secondary Objective:

Toachievethisprimeobjective,therearesomeotherobjectives,whichputdown

below


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a) To know the current economic condition in Bangladesh.b) To view the achievement of entrepreneurship in Bangladesh.c) To gather practical knowledge about fueling sector in our economy.d) To point out the future and benefit of entrepreneurship development.

1.4: Scope of the Study

There is a certain boundary to cover this report. Our particular report only covers

entrepreneurship action plan in Bangladesh. We discuss very shortly in our present

economy condition and economic activities. We mainly point out the thrust sector in our

economy and procedure how to capture the opportunity through developing the

entrepreneurship action plan. Our report is prepared only based on data that collected from

internet, publication and journal. Other sources are not available for us.

1.5: Limitations of the Study

We are lucky enough to get a chance to prepare a report on The implementation of

entrepreneurship action plan in Bangladesh We tried heart & soul to prepare a well-

informed report. But unfortunately we faced some difficulties when preparing this report.

We tried to overcome the difficulties. In spite of trying our level best, some difficulties that

hamper our schedule report work:

1.5.1 Shortage of time:

Within a short time, we need to prepare some other courses reports for in this session.

For this reason, we could not get a fluent time schedule for the report.

1.5.2 Limitation of supporting tools:

Internet is the major one way of collecting necessary data. Other sources are not so

available for us. But internet service is not always available in our local town, Khulna.

Most of the time, we suffered for server disconnection as well as load shedding.

1.5.3 Difficulty in collecting data:


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Our required data are not available in internet. So we are sorry to say that we cant

include all sort of necessity data that data presentation make our report more

resourceful.

1.6: Methods

For making any report most of the data should be taken that reflect actual situation. For our

report we have collected various data from various sources. But in this report we are fully

depend on only the secondary sources, we do not collect data from primary sources. The

secondary sources from where we collect data and prepare our report:

Internet Prominent Report Journal

1.7: Report Preview

In the following pages, the report is prepared for the practical knowledge about the

implementation of entrepreneurship action plan in Bangladesh. First we draw an overall

entrepreneurship condition in Bangladesh. Then, we try to point out the procedures of

fuelling entrepreneurial mindsets and encouraging people become as an entrepreneur. After

that we identify the supporting tools that gear entrepreneurship growth straightforwardly.

And finally we dream a Dream Bangladesh after accomplishing the entrepreneurship

action plan.


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CHAPTER 2

INTRODUCTION ON ETREPRENEURSHIP


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2.1 Definition of entrepreneurship

Entrepreneurship is an important ingredient that forces the economic growth of a

developing country. It is a precondition for sustained economic development.

Many scholars and researchers have defined the entrepreneurship. Economist R Cantillon is

the pioneer in this field. In his definition, the main features of entrepreneurship are

identified as risk taking and action orientation.

Famous writer Peter Kilby focused any type of economic activity as entrepreneurship and

anybody engaged in these activities as an entrepreneur.

One of the eminent scholars J.J. Kao pointed entrepreneurship as adventurism, adrenalin

addition risk taking and thrill seeking.

So we conclude that entrepreneurship accomplish with risk taking and innovative venture.

An entrepreneur creates the forces of change and utilizes the same in accelerating thesocioeconomic value-addition of a country through resource utilization, employment

generation, capital accumulation and industrialization.

2.2 Entrepreneurship condition in Bangladesh

Bangladesh is a developing nation but industrially it is still underdeveloped. The country is

going through a transition with respect to economic development. Right at this moment

Bangladesh enjoys a remarkable success in macro-economic management as demonstrated

by increased tax revenues, fading fiscal and current account imbalances and stability inprice level.

Bangladesh about 2 million people are engaged in Small Scale Enterprises (SSEs), which is

about 78% of the total industrial work forces and contribution 75% of industrial sector.

SSEs provide a major share of employment of the country.


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CHAPTER 3

THE IMPLEMENTATION OF ENTREPRENEURSHIP

ACTION PLAN


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3.1 Significant achievement:

In last five years (2003-2008) entrepreneurship activities has been boosted in Bangladesh. It has

gradually increased in our economy. The entrepreneurial development performance was a result

of effort generated from various department of our economy.

The sectors are described with their respective affect below:

1. Increased population with increased consumption needPopulation of our country has changed dramatically in last years. During the past five

years it resulted from 15 crore to 17 crore. Per capita income and Consumption has

increased too. Such increase made needs of more goods and products.

2. Expansion of Entrepreneurial and small business concept among peopleThe Least Developed Countries (LDCs) in the east have started refocusing their attention

on SMEs to enhance their role in bringing about structural changes in their economies.

For Bangladesh SMEs have assumed special significance for poverty reduction

programmes and potential contribution to the overall industrial and economic growth.

The latest BSCIC estimates suggest that there are currently 55,916 small industries and

511,612 cottage industries excluding handlooms. Including handlooms, the number of

cottage units shoots upto 600,000 units indicating numerical superabundance of the SCIs

in Bangladesh. Quoting informal Planning Commission estimates, the SMDF puts the

number of medium enterprises (Undefined) to be around 20,000 and that of SCIs to be

between 100,000 to 150,000.

This wide variation in the BSCIC and Planning Commission estimates of the numerical,

size of the SMEs might be due to at least two reasons: (a) different set of definitions of

the SMEs and (b) different coverage of SME families. This strongly suggests the need for

adopting and using an uniform set of definitions for SMEs by all Government agencies to

help formulation of pro-active SME promotion policies.


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Despite data limitations some rough indications may be provided regarding the trend of

SME sector growth as presented the Table 1.

Table 1

Growth of SSIs sector (Excluding Handlooms) in Bangladesh

In terms of number of establishment, the SME sub-sector has exhibited notable

dynamism, registering reasonably high growth rates over the decades of 1980s and 1990s.

This numerical expansion of the SMEs has contributed towards substantial new business

creation in the industrial economy of Bangladesh. Available evidence suggests that the

SMEs were responsible for giving birth to 60 percent of the new industrial enterprises

during 1980s. Growth in SME employment seems to have been even better during the

same period.

3. Increase of educated people with their verities needToday more people are educated they are now with more need of various types of goods,

services and products. Increase in consumption items let number of business to borne. As

a result entrepreneurial ventures have emerged all over the country.

4. Standardised entrepreneurial practice and policy tools

Year No. of Units Employment Value Added (TK.)Small and Cottage

CombinedSmall Cottage Small Cottage

1981 24590 321743 322110 855200 179871991 38294 405476 523472 1331032 211542001 (end of

June) 55916 511621 808959 166724 29323Average

AnnualGrowth Rate

(% change)6.36 2.95 7.55 4.73 3.15


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Because of its importance Government has took steps to standardize the policy tools over

time regarding small business and industries. By the recent past the ministries, the

different board and industries has made the situation very much favourable to

entrepreneurial development.

And the others are:

5. Involvement of energetic young generation in various small businesses.6. Advancement of information technology and telecommunication7. Advanced modern living concept8. Foreign direct investment and remittance9. Expanded international trade both export and import

3.2 Goal setting for the coming five years:

Any influencing plan that will bring change in expected way the total economy needs time. And

for an entrepreneurial development action plan needs obviously time. We assumed for a 5 year

project that will ensure a world level entrepreneurial performance in Bangladesh economy. Our

expected actions will follow the three steps entrepreneurship action plan proposed by many

modern entrepreneurship writers.

Supporting activities:

Registration of the business enterprise Arranging finance Providing production facilities Counsel and guidance for boating machinery and tools Supply of scarce raw materials through syndicate formation


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CHAPTER 4

STRATEGIC AREA ONE: FUELLING ENTREPRENEURIAL

MINDSETS AND PRACTICES


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4.1 Fostering entrepreneurial mindsets through stimulatory activities

Entrepreneurship action can be more effective by taking some stimulatory activities

which are:

Entrepreneurial education Planned publicity Help and guidance in selecting product and project report Making available techno economic information regarding product and profit Availability of local agencies with trained personnel for entrepreneurial counselling and

promotion

Organizing entrepreneurial forum


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CHAPTER 5

STRATEGIC AREA TWO: ENCOURAGING MORE

PEOPLE TO BECOME ENTREPRENEURS


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Encouraging more people to become entrepreneurs is a fruitful action to implement the

entrepreneurship action plan. We point out some action which is needed to accomplish this

job perfectly that is:

o Identification of potential entrepreneurso Developing locally suitable new products and processeso Motivational training to new entrepreneurs

More over, entrepreneur action plan procedures need to take some effective activities those

are:

5.1. Reducing the stigma of business failure:

Entrepreneurship means a venture with risk. So its likely that many of the entrepreneurs

would fail. They will loose their capital. However if there is no protection, measure for

them surely economy will be looser. In this stage government should ease the stigma of

failure. In our plan we propose such a fund and insurance protection to immediately fill up

the accident or failure cost of any entrepreneurs projects.

5.2. Facilitating the transfer of businesses:

Transfer of business refers the removal or withdrawal of investment from a particular

business to another one and to another place or another segment. However in coming future

business structure should be formed in such a way that one can easily transfer his business

to new area or new field.

5.3. Improving social security of small business owners:

Owners of small business owners in our country are often unsecured both economically and

physically. We propose to create a better security of law and order as well insurance system

and protection against socio political conflicts or calamity affect.


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CHAPTER 6

STRATEGIC AREA THREE: GEARING

ENTREPRENEURS FOR GROWTH AND

COMPETITIVENESS


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6.1 Support for women and ethnic minorities:

6.1.1 Credit for women

Governmental and NGO programmes which provide collateral free loans have assumed

tremendous importance in providing credit to poor women in Bangladesh. A few examples

are:

1. The Bangladesh Rural Development Board's Women's Programme covers 190thanas and has provided credit to 100,830 members through 5,915 societies. 200

million Tk. was disbursed in 1996 of which 120 million was from the bank and 80

million from the women's savings (up to end 1996).

2. The Palli Karma Shahayak Foundation (PKSF) has disbursed about 600 million Tk.through 100 NGOs, which has reached 167,027 women and 22,293 men (up to June,

1994).

3. The Bangladesh Rural Advancement Committee (BRAC) has disbursed acumulative amount of 11,714 million through 4.25 million Tk. loans to 45,542

women and 3,364 men (up to June 1996).

4. Grameen Bank (GB) has disbursed a cumulative amount of Tk 65,509.8 million to1,937,348 women (as of December 1996).

5. The Association for Social Advancement (ASA) has disbursed a cumulative amountof 3,411 million Tk. 495,423 women and 348 men as of June 1996.

6. Women's Entrepreneurship Development Programme (WEDP) The objective is todevelop women as entrepreneurs by providing them training and credit facilities to

establish small scale manufacturing and service units. The project has so far assisted

thousands women entrepreneurs to set up independent business enterprises.

6.1.2 Employment for Rural Women

Several ministries of have programmes targeting rural women and employment. Below is a

sample of the activities in this area.


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a. The Agro-Based Development Programme for Women aims at developing women'sskills in poultry raising, vegetable cultivation and small scale fisheries through

practical training. Women are also given training in family planning, literacy, child

care, health and nutrition etc. and credit support for income generating activities.

The programme is implemented by the Department of Women's Affairs.

b. The Rural Maintenance Programme employs over 50,000 rural women to maintain60,000 miles of earthen roads. In the programme, women are employed as labourers

and supervisors for a period four years, during which they are given training and

assistance for self-employment after completion of the contract. Implemented by the

Local Government Engineering Department, in collaboration with CARE

International and Union Parishads, the programme has contributed to improved rural

communication and marketing.

c. The Population Control Through Women's Cooperative project began in 1974 todevelop rural women's cooperatives. The project, implemented through the

Bangladesh Rural Development Board, offers family planning motivation and

services integrated with income generation activities. Ten training cum production

centres have been established to develop women's vocational skills, where women

cooperative leaders are trained at thana (sub-district) level, and then act as trainers

for their group members. By 1992, the project covered over 3,000 women's

cooperative societies.

d. Started in 1975, and popularly known as the "Mothers' Club", the Use of RuralMother's Centres for Population Activities project integrates population activities

with human development efforts. The project involves women in self-employment

activities and seeks motivate women towards establishing a small family norm. Skill

development training to help women develop self-employment opportunities,

functional education on maternal and child care, nutrition and family planning are all

integrated parts of the project, which is administered by the Ministry of Social

Service.


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6.2 Facilitating SMEs business co-operation

SMEs may include barber, pizza shop, small scale production unit for pizza, small factory,medium cottage industry, small flat service company, transportation vehicle parts, knitting,

cutting, sewing industry and such many things. However we propose Govt. will increase

assistance in such EPZs, BSCICs across the country.

6.3 Fostering innovative clusters

Innovative cluster means entrepreneurship companies under a cluster who are working in

various fields at a time. In Bangladesh such clusters are

o Destiny group of industries.o Jamuna Gruoup,o Amin Mohammedia group,o Bosundhara Groupo BSB Consultant Groupso

Akij Groupo BRB Cables

Such clusters create huge employment option in the economy. They increase the finance

flow in the economy.


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CHAPTER 7

IMPROVING THE FLOW OF FINANCE


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from the flood of imported consumer and industrial products - cosmetics and toiletries, food and

beverages, textiles and apparels, footwear and leather goods, chemicals and pharmaceuticals,

light engineering products, machine tools, hand tools and so on. All these products (all under the

SME category, and the rate at which the glittering multistoried shopping malls are springing up

in Dhaka and other major cities of the country is perhaps a good indicator of the rate of

displacement of domestic products by imported merchandise. Although some producers have

been successful in improving their products and significantly increasing external market access,

most are languishing.


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CHAPTER 8

STRATEGIC AREA FIVE: CREATING A MORE

SME-FRIENDLY REGULATORY AND

ADMINISTRATIVE FRAMEWORK


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8.1: Listening to SMEsSME friendly regulatory and administrative framework is another vital thing we propose to

include for the next ten years entrepreneurship action plan

Todays business world is more dynamic and time is important here. License providing

should be done with utmost efficiency. Recent example made by the govt. Is a license

,making within 24 hours in Chittagong is obviously a big example of success. In coming

years updated technology will turn things faster.

It would be a good idea to extend assistance to the existing and prospective entrepreneurs in

the SMEs sector, focussing on the thrust sectors identified by the government as likely to

have both better growth prospects as well as some comparative or competitive advantage for

Bangladesh. The promised assistance for SMEs in the industrial policy as well as in the

Export Policy have yet to specifically address many technical matters, without which the

capacity for production of competitive goods cannot be developed. While it will not be

possible to itemize all the issues and their implications in this short article, we cannot omit

mentioning some of the more important matters, such as:

Selection, acquisition and application of the appropriate technology for productionthat would enable production of goods of competitive quality and competitive price,

main taining optimum productivity, while environmentally not injurious. It would be

important to determine the correct balance between labour-intensive and capital-

intensive processes for achieving the required productivity and quality.

Compliance with Quality Assurance and environmental friendliness standards,through adoption of TOM, ISO 9000, ISO 14000, etc., and necessary training for

practicing these.

Bangladeshi workmen are extremely good at acquiring production skills to highdegrees of tolerance, and are capable of production by copying samples. But, due to

limitations in education, skill and technical knowledge, they are unable to produce

goods from blueprints and drawings, adhering to the standard specifications. This

deficiency has to be removed quickly by establishing appropriate training and skill

development facilities.


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Many countries developed their SMEs by copying products from other countries, butthis is no longer possible under WTO rules for Intellectual Property Rights (IPR). It

is therefore, essential that indigenous R&D capabilities are developed quickly.

Most manufacturing processes are today electronically controlled. Hence, adequateskill has to be developed for using and maintaining electronic components and

control devices.

Institutional facilities are needed for entrepreneurship development, includingparticularly capturing the high entrepreneurial ability of the women of Bangladesh.

SMEs must have logical linkages between micro-enterprises below and largeindustries above them. Their notional hierarchical relationships should be well

recognized and made use of. An efficient subcontracting culture has to be

developed, and well functioning regulatory regimes should be put in place so that

the network among the subcontracting firms work efficiently. The culture of

respecting the needs of these contracting parties, following JIT (Just In Time)

systems has to be adequately developed and faithfully practised.

Most potential investors in the SME sector today are not entrepreneurs in the realsense, inasmuch as they do not have an already developed capability to decide on

viable investment avenues, develop project profiles and set up appropriate

establishments for production, management and marketing. Free technical assistance

will have to be provided to them for accessing information, and developing bankable

project proposals in the sectors in which they might have knowledge, preference and

perhaps some experience and expertise. Similar assistance will also he needed to

meet the various compliance issues under WTO rules.

Prospective investors would have to be given all kinds of facilities for getting startedin an unreserved manner and without any kind of hassle. They should be subject to a

minimum of regulations in the beginning, except perhaps registration of the unit

with relevant business Associations and/or Chambers of Industries, complying withthe rules for Registration of the company under the relevant law and Board of

Investment (BOI), and submitting annual reports about their product and marketing.

Financing them should not require initially any physical collateral other than their

factory establishment. They should have sufficiently long moratoria from different


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kinds of taxes, VAT and others levies, and they should be given protection against

non-official extortionists as well.

Designated financial institutions should not only be encouraged but also be helped todevelop expertise in industrial financing, technology assessment and acquisition of

relevant sectoral knowledge, as well as capability of working with clients so that

project finance by them can be successfully implemented, overcoming all the usual

bottlenecks experienced from sources of financing.


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BIBLIOGRAPHY

Reference Book:

Z Mamun Muhammad & Islam Nazrul, Entrepreneurship Development An operational

approach, 1st

edition, The university press limited, Dhaka, 2000

Report:

An approach analysis of Micro Enterprise in Bangladesh Chowdhury Mahbubul Alam and

Kazuhiro Miyagi, Department of international Studies, Hagi International University.

Poverty in Bangladesh: Building on Progress, Poverty Reduction and EconomicManagement Sector Unit, South Asia Region, World Bank

Bangladesh 2015: Achievements and Future Challenges, Power and Participation Research

Centre, Dhaka, Bangladesh (PPRC), March 2006

SMEs in Bangladesh, Abdul Awal Mintoo

The small and medium enterprises (SME) in Bangladesh: an overview of

The current status, Dr. Momtaz Uddin Ahmed, Vice chancellor State university of

Bangladesh

Internet site:

www.bangladeshinfo.com

www.bbc.co.uk

www.dhakachamber.com

www.state.gov

www.ssrn.com

www.thedailystar.net

A European Commission Entrepreneurship action plan based Action profile for Bangladesh

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