Entrepreneurial environment & infrastructure
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Transcript of Entrepreneurial environment & infrastructure
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Significance
and role of
Environment on
ED
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Entrepreneurs are not born…….they are
made right from the childhood
The environment around the entrepreneur
makes an entrepreneur
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Environmental factors
Parents
Friends
Teachers
School atmosphere
Neighbourhood
Society around him
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Entrepreneurship is the result of the
interaction and assimilation of different
social and environmental factors
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Entrepreneurial Environment
Entrepreneurial Environment is a combination of factors that play a role in the development of entrepreneurship.
First, it refers to the overall economic, socio-cultural, and political factors that influence people’s willingness and ability to undertake entrepreneurial activities.
Second, it refers to the availability of assistance and support services that facilitate the start-up process.
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The available literature on entrepreneurial
environments can be grouped into three
broad streams:
general environmental conditions for
entrepreneurship;
environmental conditions of a particular
country or region; and
the role of public policy in shaping the
entrepreneurial environments.
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General Environmental
Conditions General environmental conditions that may
influence entrepreneurship include: legal and institutional frameworks for efficient
functioning of private enterprises
presence of experienced entrepreneurs and skilled labor force
accessibility of suppliers and customers or new markets
high degree of competition among firms
favorable government policies
provision of training and support services
supportive infrastructure
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In addition, the literature suggests that the
characteristics of people, their skills,
experience, and motivation, play
important roles in new venture creation
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Country/Region Specific
Environmental Conditions
Countries that keep rules and regulations at a minimum, offer tax and other incentives, and provide training and counselling services to start-up entrepreneurs increase the likelihood of new venture start-ups.
Furthermore, factors such as availability of financial resources, large size urban areas, and presence of universities for training and research are found to be very important to increase the rate of new venture creation
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Studies also show that entrepreneurs face
several obstacles, such as lack of financial
assistance, lack of information on various
aspects of business, excessive taxation,
and high rate of inflation.
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Role of Public Policy Scholars that focused on the role of public policy
suggest several policy options for developing entrepreneurship.
These policy options include provision of venture capital funds
tax-based incentives, and government procurement programs
protection of proprietary ideas and innovations
investment in education and research
explicit recognition of, and support for, entrepreneurship by government agencies
fostering of entrepreneurship by educational institutions
and minimization of entry barriers.
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Environmental Analysis
Positive environment
Encourages entrepreneurial development
and growth
This is called entrepreneurial motivation
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Greatest Motivation……
Money
But………
It is not alone that inspire an entrepreneur
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Other motivating factors are:
Internal
External
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Internal factors
Family background
Education background
Training and work experience
Desire for achievement
Desire to head a unit
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External Factors
Availability of inputs or raw materials
Demand of the product and large profits
Availability of infrastructure and finances
Availability of technology
Short supply of the product
Government initiative and assistance
Ready availability of sick units
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Entrepreneurial motivation
Classified in three categories
Factors of Compulsion
Facilitating factors
Entrepreneurial ambitions
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Role of Infrastructural Network
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The basic infrastructure at the place of
the project help in
speedy implementation of the project
Reduce costs
Increase profitability
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Better or rapidly improving infrastructure in
a particular area may attract more
entrepreneurs and see enhanced
entrepreneurial activities
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Basic infrastructure requirements
Certain infrastructural elements seem to make substantial impact on the entrepreneurial environment.
modern transport and communication facilities that provide easy access to suppliers and customers
Road Network
Connected to Rail
Ports
Airport
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location decisions of based on the
community’s ability to supply trained and
capable workers and on the proximity to
research and development institutions
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existence of universities and research and
development programs
a well-educated and technically skilled
labor force, and
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Supporting industries
Climatic conditions
Logistic support
Electricity
water
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Role of Infrastructural Network
Most commercial operations such as venture capital firms and commercial banks tend to exhibit greater interest in concentrated, urban areas that usually have a well-developed infrastructure and concentrated demand for funds
They also favour areas where businesses are easier to supervise and monitor and the cost of supervising and monitoring loans is relatively low