ECONOMIC ENVIRONMENT OF BUSINESSECONOMIC ENVIRONMENTAL FACTORS INFLUENCING ENTREPRENEURS1. Basic infrastructure
Good road, seaway, communication facility, water, power encourages entreps.These provided by the Govt. This speeds up production & trade. This reduces cost of production. In rural & backward areas such facilities are not provided.
-Rigid norms of banks & financial institutions. (Risk free projects & existingunits are preferred due to the following problems).-High rate of interest-Low capital market (share / debenture / bond) awareness.-High import cost of technology-Rigid foreign exchange regulations-Slow apply of raw materials & price fluctuations increases working capitalneed.-Govt. should provide financial assistance or act as guarantor in raising loans.
3. Raw material
-Right quantity, quality of raw materials at reasonable price are not availablenear the industry.-Govt should supply scarce materials in time or it may provide suppliersinformation.-Raw material import should be liberalized-Govt. should encourage R&D and wide network of distribution centers.
-Graduates are not willing to join in the avialable jobs due to status, salary or they prefer only selected jobs. (ie. unemployability)-Shortage of skilled labours. Now Govt. initiates technical, electrical,management education. But knowledge works are available more than manualworkers.
Manual works are immobile due to language, culture & sentiment. Lesscontact between employer and manual job seekers. Because they don’t watchadvertisement. Govt & private employment services are increasing the contact.