Entrepreneurship Development

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Chapter 5

ENTREPRENEURSHIP DEVELOPMENT ENVIRONMENT

Entrepreneurship is not an inborn skill; it is a product of environment. It involves a complex of economic and social behavior. To be successful, an entrepreneur has to remain dynamic and responsible to the whole environment. Entrepreneurship can hardly survive under any given circumstances. It can flourish only under right environment. It is a part of total system. The social values, culture, government policies, political system, technology, economic conditions, laws, etc influence the growth of entrepreneurship.

In fact, the entrepreneurship can not be kept aloof from the changing social values, ideologies, new emerging aspirations, environmental pressures, religious beliefs, consumer wants, and society needs etc. Business is a system made up of certain environmental factors which require the entrepreneurs to adopt a dynamic attitude and a new strategy of their own.

Entrepreneurship environment refers to the various facets within which enterprises- big, small and other have to operate. The enterprise is therefore, influenced by the environment. By and large, entrepreneurship is influenced by an environment created by political, social, economic, national, legal forces, etc. Entrepreneurial environment is broadly classified into six important segments:[1] 1. Political environment includes:

(a) Political atmosphere
(b) Quality of leadership
2. Economic environment includes:
(a) Economic policies
(b) Labor
(c) Trade
(d) Tariffs
(e) Incentives
(f) Subsidies
3. Social environment includes:
(a) Consumer
(b) Labor
(c) Attitude
(e) Opinion
(f) Motives
4. Technological environment include:
(a) Competition & risk
(b) Efficiency
(c) Productivity
(d) Profitability

5. Legal environment include:
(a) Rules & Regulation
(b) Legal obligation
6. Cultural environment includes:
(a)Structural aspiration
(b) Values.

POLITICAL ENVIRONMENT
Political environment affects the entrepreneurial growth and accelerate the process of economic activity. Law and order is of high propriety, followed by government policies in regard to the promotion of entrepreneurship, followed by incentives, encouragement and right institutional structure will go a long way in fostering entrepreneurship.

ECONOMIC ENVIRONMENT
The entrepreneurial growth and development is also governed by the economic environment. It encompasses a wide spectrum of items, namely, land, availability of raw materials, skilled labor, infrastructure, machinery, capital and so on.

Shortage of raw materials can be much adversely affect entrepreneurial environment and it has been affecting many industries. Shortage of raw materials, inferior quality, high price resulting in high cost of production are bringing bad name to small industry. Without raw- materials, no industry can run and no entrepreneurship would come up. The more favorable the conditions of raw- materials are, better would be its influence on entrepreneurial emergence.

The role and importance of market and marketing should never be under- estimated for the up rise of entrepreneurship. If the proof of pudding lies in eating, the proof of production lies in marketing. If the entrepreneur does not possess knowledge and various marketing technique, he is unlikely to survive. The size and composition of market both influence entrepreneurship in their own ways.

The benefits of an improved and healthy market condition in the environment of entrepreneurial growth are self- explanatory. Germany and Japan are examples where rapid improvement in market was followed by rapid entrepreneurial appearance.

SOCIAL ENVIRONMENT
Social environment strongly affect the entrepreneurial behavior which contribute to entrepreneurial growth. The social factors can be (i) family background (ii) Kith and kins (relatives, friends and teachers), (iii) religion, (iv) social status, (v) social mobility and (vi) social marginality.

Family backgrounds...
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