1. ENTREPRENEURSHIP DEVELOPMENT
Factors Affecting Entrepreneurial Growth
Chapter # 2

2. Factors Affecting Entrepreneurial Growth
1. Economic Environment:
One of the most important factor affecting entrepreneurship is economic environment. It comprises of capital, labor, raw material and market demand.
Capital: is one of the most important factor of production for the establishment of an enterprise. Increase in capital investment in viable projects results in increase in profits which help in accelerating the process of capital formation. Entrepreneurship activity too gets a boost with the easy availability of funds for investment.

3. Factors Affecting Entrepreneurial Growth
Labor: Easy availability of right type of workers also effect entrepreneurship. The quality rather than quantity of labor influences the emergence and growth of entrepreneurship. The problem of labor immobility can be solved by providing infrastructural facilities including efficient transportation.
Raw Materials: it is one of the basic ingredient required for production. Shortage of raw material can adversely affect entrepreneurial environment. Without adequate supply of raw materials no industry can function properly and emergence of entrepreneurship to is adversely affected.

4. Factors Affecting Entrepreneurial Growth
Market: The role and importance of market and marketing is very important for the growth of entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the absence of latest knowledge about market and various marketing techniques.

5. Factors Affecting Entrepreneurial Growth
2. Social Environment:
Strongly affect the entrepreneurial behavior, which contribute to entrepreneurial growth. The social setting in which the people grow, shapes their basic beliefs, values and norms. The social factors can be
Family Background – Joint Family can Provide Family Resources to Invest and Expand Family Business.
Friends and Relatives, Religion, Social status

6. Factors Affecting Entrepreneurial Growth
2. Social Environment:
Social Mobility
Degree of social and geographical mobility and the nature of mobility channels within a system.1st view says high degree of mobility is favorable for entrepreneurship development. 2nd view is lack of mobility possibility promotes entrepreneurial growth. 3rd view says a system should neither be too rigid nor too flexible. If it is too flexible then individual will settle towards other roles. If it is too rigid entrepreneurs will be restricted along with other activities.
Social Marginality
Refers to a state of being excluded from social activity as an "outsider."
Positively influence entrepreneurship

7. Factors Affecting Entrepreneurial Growth
3. Compelling Factor
Many a times, it is a compulsion rather than willingness which forces one to become entrepreneur whether he succeeds or fails.
Strong desire to do something independent
Government incentives.
To make use of their technical and professional skill
Manufacturing experience
Business experience
Technical know how
Excess funds lying idle can also encourage one to become entrepreneur.
Responsibility of maintenance of large families, shortage of funds

8. Factors Affecting Entrepreneurial Growth
4. Cultural Factor
Tangible man made objects like furniture .
Intangible concept like laws, morals knowledge.
Values and behavior accepted within the society.
5. Facilitating Factor
Elders are resistant to permit young entrepreneur.
Parents should encourage the young entrepreneur
The success stories of entrepreneurs can be incorporated in the curriculum.

9. Factors Affecting Entrepreneurial Growth
6. Psychological Factor
Achievement motivation means a drive to overcome challenges.
It is a personality characteristics which is a major determinant of entrepreneurship development.
Average level of achievement motivation existing in a society ensures a relatively high amount of entrepreneurship in the society.
People with low achievement motivation work for money or other such incentive.
People with high achievement motivation work for status, prefer personal responsibility for decision, take moderate risk and possess interest in concrete knowledge of the result.
The trait of need for achievement can be developed through various training programs.

10. Factors Affecting Entrepreneurial Growth
7. Attitude of Government:
Government all over the world can play a very important role in the emergence of entrepreneurship. Positive actions by the government can facilitate growth of entrepreneurship whereas negative actions can adversely influence entrepreneurial emergence & growth. It is the govt. which regulates business activities.
Govt. policies are going to influence all the decisions of the entrepreneurs regarding what to produce, how much to produce, of what quality to produce where to produce and for whom to produce.
The entrepreneurs are to operate within the concessions and limits set by the govt. It is in the interest of the potential entrepreneur to thoroughly scan the govt. policies before taking decisions with regard to setting up his enterprise.

11. Factors Affecting Entrepreneurial Growth
Government should maintain a proper distribution of economic power between private and public sector.
They Encourage the tempo of industrialization by spreading entrepreneurship to every city, town or village.
They should disseminate the entrepreneurial talent concentrated in a few dominant communities to a large number of people of varied social and economic groups.
Several institutes should be established to encourage the entrepreneurship.

12. Factors Affecting Entrepreneurial Growth
8. Education and Technical Know How
Education, entrepreneurship and development are interrelated. Education helps in the development of capabilities of individuals which facilitates the emergence and growth of entrepreneurship
In the modern competitive world to survive the entrepreneurs have to keep an eye over the technological advances taking place around. These technological development provide opportunities for the entrepreneurs to develop and produce new product.

13. Factors Affecting Entrepreneurial Growth
9. Financial Assistance from Institutional Sources
Liberal financial assistance from institution certainly boosts moral of young entrepreneurs.
For seeking the assistance it is necessary for the entrepreneurs to have some financial base and the institutions and banks also provide facilities in the form of finance, consultancy, purchase of land, availability of fixed assets on hire-purchase installment.
The government grant finance to the entrepreneur on concessional basis at the low rate of interest
Various types of subsidies, concessions and facilities are given to attract entrepreneurs in backward area.

14. Factors Affecting Entrepreneurial Growth
10. Accommodation in Industrial Estate
The industrial estate are meant to provide wide variety of facilities to the entrepreneur. Including common production and testing facilities.
The provision of industrial estates has helped
Create new employment opportunity
Disperse industry outside the concentrated cities
Relocate the existing units operating in congested areas
Raise the efficiency of small units through common facilities.

15. Factors Affecting Entrepreneurial Growth
11. Encourage from Large Business
Reservation policy initiated by the government prohibits the large houses to compete with the small.
12. Machinery on Hire-purchase
Entrepreneurs are supplied machinery through liberalized terms and condition

16. Importance of Entrepreneurship in The Process Of Economic Development
Creation of Employment Opportunity
Unemployment is one of the most important problems confronting developing and underdevelopment countries
Entrepreneurs by setting up their own units enabling themselves to get self employment.
With the setting up of more and more units by entrepreneurs both on small and large scale, numerous job opportunities are created for others.

17. Importance of Entrepreneurship in The Process Of Economic Development
Capital Formation
Entrepreneurs as an organizer of factors of production employs his own as well as borrowed resources for the setting up of his enterprise.
Entrepreneur mobilizes idle saving of the public and put them to productive use. In this way he helps in capital formation which is so essential for the industrial and economic development of a country.

18. Importance of Entrepreneurship in The Process Of Economic Development
Balanced Regional Development
Small scale units can be set up in industrially backward and remote areas with limited financial resources.
Use of Local Resources
In the absence of any initiative local resources are likely to remain unutilized.
Proper use of those resources can result in the progress or development of the area and that too at lower cost.

19. Importance of Entrepreneurship in The Process Of Economic Development
Improvement in Per Capita Income
More enterprises will lead to more production, employment and generation of wealth in the form of goods and services.
It will result in the increase in the overall productivity and per capita income in the country.
Improvement in The Standard of Living
Entrepreneurs by adapting latest innovations helps in the production of wide variety of goods and services.
By making efficient use of the resources they start producing more of better quality and that too at lower costs which ensures easy availability of better quality products at lower prices to the consumer and results in the improvement in the standard of living of the people.

20. Importance of Entrepreneurship in The Process Of Economic Development
Economic Independence
Entrepreneurs develop substitute goods being imported and thus prevent over-dependence on foreign countries and at the same time help in saving of previous foreign exchange.
Through sale of their surplus products in foreign market entrepreneurs enable a country to earn foreign exchange.
Export promotion and import substitution thus help in promoting economic independence of the economy.

21. Importance of Entrepreneurship in The Process Of Economic Development
Preventing Industrial Slums
Dispersal of industries can help in the overcoming the problem of industrial slums which results in over burdening of civic amenities.
Reducing Social Tension
Unemployment amongst the young and educated people is emerging as the major cause of social unrest.
Entrepreneurship Development can help in channeling the talent of this section of society in the right direction by providing proper guidance, training and assistance for setting up their enterprise.

22. Importance of Entrepreneurship in The Process Of Economic Development
Facilitating Overall Development
An entrepreneur acts as a catalytic agent for change which results in chain reaction.
With the setting up of an enterprise the process of industrialization is set in motion.
This unit will generate demand for various types of inputs required by it and there will be so many other units which will require the output of this unit. This leads to more and more unit there.
Entrepreneurs, thus create an environment of enthusiasm and convey a sense of purpose.

23. END OF CHAPTER # 2