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FACTOR AFFECTING ENTRREPRENEURSHIP GROWTH
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FACTOR AFFECTING ENTRREPRENEURSHIP GROWTH
Development of entrepreneurship is not a spontaneous one but a dependent of phenomenon of economic, social, political, psychological factors supporting conditions to entrepreneurship development
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FACTOR AFFECTING ENTRREPRENEURSHIP GROWTH
Economic Factor -Economic environment exercises the most direct and immediate influence on entrepreneurship. Capital factors of production Increase in capital investment in viable projects results in increase in profits too gets a boost with the easy availability of funds for investment Bank loan
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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. -low-cost labor Raw Materials -In the absence of raw materials, neither any enterprise can be established nor can an entrepreneur be emerged -basic ingredients required for production -Shortage of raw material can adversely affect entrepreneurial environment.
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Market - The role and importance of market and marketing is very important for the growth of entrepreneurship - modern competitive world no entrepreneur can think of surviving in the absence of latest knowledge about market and various marketing techniques. - The size and composition of market both influence entrepreneurship in their own ways.
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Infrastructure -Expansion of entrepreneurship presupposes properly developed communication and transportation facilities Post and telegram substitute by s- before use birds
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Non Economic Factor Social Factors Caste Factor/Family Background
-cultural practices and values in every society which influence the’ actions of individuals. -The Brahmana (priest), the Kshatriya (warrior), the Vaishya (trade) and the Shudra (artisan): -social mobility -type of family and economic status of family -
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Education -Education enables one to understand the outside world and equips him with the basic knowledge and skills to deal with day-to-day problems. -Certain societies encourage innovations Cultural Value -Entrepreneurial growth requires proper motives like acquisition of prestige and attainment of social status. -strength of these motives depends upon the culture of the society.
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Psychological Factors
Need Achievement Need for achievement (N-Ach) refers to an individual's desire for significant accomplishment, mastering of skills, control, or high standards. need achievement’ is social motive to excel that tends to characterize successful entrepreneurs i.e entrepreneurs, had this characteristic -Moreover, some societies tend to reproduce a larger percentage of people with high ‘need achievement’ than other societies- singapore -that people with high need-achievement are distinctive in several ways.
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Status Respect/Attitude of the Society
-There are several other researchers who have tried to understand the psychological roots of entrepreneurship -Motives
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Government Policies Role of Government in Entrepreneurship Development/ Growth Government Policies Effect of Government Policies
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Role of Government in Entrepreneurship Development/ Growth
Creates conducive business environment-PEST Promote financial help via venture capitals Promoting establishment of incubators.(providing a controlled environment for the care and protection of premature or unusually small babies) Develop entrepreneurial ecosystem
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Role of Government in Entrepreneurship Development/ Growth
Attractive investment Infrastructure Easy taxation Fund raising research business friendly laws and a function
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Government policies Entrepreneurship Economic Development
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Government Policies Economic reforms Industrial Policies
Financial sector reforms
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Economic reforms A serious financial crisis in the mid-1980s brought the IMF and World Bank to the rescue with conditional economic economic reform comprises policies directed to achieve improvements in economic efficiency Requires gradual reduction in import and increase in export- tax free reforming economy-wide policies such as tax policy and competition policy
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Economic reforms Liberalization Privatization Globalization
Shows the direction, making the economy more market and service oriented and expanding the role of private and foreign investment -freedom to import technology - Action plan for information technology and software development
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Privatization Shows the path; process under which state/public assets were transferred to the private sector Transferring ownership of a business, enterprises, agency from public sector to private sector Increase efficiency in the delivery of programs and service Provide competition in market place which transfer the lower price and greater choice for the consumer
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Globalization Shows the ultimate goal , unrestricted cross border movements of goods and services, capital and the labor force “ the intensifications of world wide social relations which link distinct localities in such a way that local happening are shaped by events occurring miles away. Culture Economy Political Technical
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Industrial Policies First established in 1991 which was focused on economic development through agriculture Industrial sector contribute nearly 20% in Nepal economy Government reviewed in 2011 - special provisions for women entrepreneurship - classification of district according to least developed , under developed - special attention for development of cottage and small scale industrial
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Financial sector reforms
The financial sector is a category of stocks containing firms that provide financial services to commercial and retail customers Nepal adopted a liberal policy in the banking sector in particular and overall financial sector in general during the mid-1980s this sector includes banks, investment funds, insurance companies and real estate, provident fund
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Financial sector is regarded as the backbone or engine of growth of any
economy whether developed or developing or in transition or emerging Financial sector reforms refer to the reforms in the banking system and capital market. Financial companies provide loans for businesses, mortgages to homeowners and insurance to consumers.
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Financial sector reforms
An efficient banking system and a well-functioning capital market are essential to mobilize savings of the households and channel them to productive uses Maximize the asset value of insolvent and bankrupt firms Promote entrepreneurship and availability of credit Establishing an insolvency and bankruptcy fund Foreign exchange service Investment services Insurance
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Social entrepreneurship
Social entrepreneurship is the use of the techniques by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues social entrepreneurs are either non-profits or blend for-profit goals with generating a positive "return to society" Social entrepreneurship is the activity of establishing new business ventures to achieve social change. The business utilize creativity and innovation to bring social, financial, service , educational or other community benefits.
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Social entrepreneurship create innovation solutions to immediate social problems and mobilizes the ideas, capacities, resources and social arrangement required for sustainable social transformation associated with the voluntary sector in areas such as poverty alleviation, health care and community development For example, an organization that aims to provide housing and employment to the homeless may operate a restaurant, both to raise money and to provide employment for the homeless Create sustainable solution that change society for the better
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Eg : extend banking facilities to poor men and women who otherwise would not get bank loans
Fair trade
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Function of social entrepreneurship
To create and maintain a stable level of employment Create jobs and provide support to social vulnerable groups Promotes development of entrepreneurial skills
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Tax reforms It is known that government needs more revenue mobilization for overall economic development and state welfare. Tax is a key source for revenue generation and mobilization. Tax is the compulsory contribution from a person to the government to expenses incurred in the common interest of all without reference to special benefit conferred.”
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