Entrepreneurial environment & infrastructure

Significance

and role of

Environment on

ED

Entrepreneurs are not born…….they are

made right from the childhood

The environment around the entrepreneur

makes an entrepreneur

Environmental factors

Parents

Friends

Teachers

School atmosphere

Neighbourhood

Society around him

Entrepreneurship is the result of the

interaction and assimilation of different

social and environmental factors

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.

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.

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

In addition, the literature suggests that the

characteristics of people, their skills,

experience, and motivation, play

important roles in new venture creation

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

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.

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.

Environmental Analysis

Positive environment

Encourages entrepreneurial development

and growth

This is called entrepreneurial motivation

Greatest Motivation……

Money

But………

It is not alone that inspire an entrepreneur

Other motivating factors are:

Internal

External

Internal factors

Family background

Education background

Training and work experience

Desire for achievement

Desire to head a unit

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

Entrepreneurial motivation

Classified in three categories

Factors of Compulsion

Facilitating factors

Entrepreneurial ambitions

Role of Infrastructural Network

The basic infrastructure at the place of

the project help in

speedy implementation of the project

Reduce costs

Increase profitability

Better or rapidly improving infrastructure in

a particular area may attract more

entrepreneurs and see enhanced

entrepreneurial activities

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

location decisions of based on the

community’s ability to supply trained and

capable workers and on the proximity to

research and development institutions

existence of universities and research and

development programs

a well-educated and technically skilled

labor force, and

Supporting industries

Climatic conditions

Logistic support

Electricity

water

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