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Factors Influencing Entrepreneurship

Factors Influencing Entrepreneurship

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Published by Hoye Oye

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Published by: Hoye Oye on Jan 19, 2012
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Factors Influencing Entrepreneurship:
What makes some entrepreneurs tick while others fail? Why do people insome cultures and regions display a better entrepreneurial spirit compared to people in other cultures or areas? Read on for an overview of the major factorsthat influence entrepreneurship.
 How Cultural Factors Influence Entrepreneurship:
Culture refers to the customary practices and beliefs that have a significantimpact on the basic values, perceptions, preferences, and behaviours of people.Culture and entrepreneurship intervene in many ways.
People traditionally engaged in businesses have a pro-business attitude anddisdain working as employees.
Many people fall outside the establishment and remain unsuited for thetraditional job market due to a strong culture of independence or other reasons.
Business school students come under the missionary zeal of teachers whoexhort them to become entrepreneurs even if the opportunity cost is veryhigh.
The culture of consumerism where people desire material goods encouragesentrepreneurship within the area as returns from a business become morethan returns from a job.
People engaged in jobs and other services pressure their children to findsecure jobs and crush their entrepreneurship spirit at a very early age.
A culture of thrift where people spend less and save for a rainy daydiscourages entrepreneurship within the local community as the returnsfrom a business become less attractive compared to returns from a job.
Cultures wherepeople are risk averseand do not attach much importance tohard work and persistence are not conducive to entrepreneurship.Top of Form
 
 How Political Environments Support or Suppress Entrepreneurship:
The following are some of the ways in which the political environmentinfluences entrepreneurship:
Unstable political conditions wheregovernmentpolicies change frequentlydiscourage business, as investors fear for the safety of their investments.
Government support to economic development through infrastructuredevelopment, facilitation, industrial parks, and the like all encourageentrepreneurship.
High taxes that cut into the returns usually discourage entrepreneurs. On theother hand, tax holidays to encourage business attract start-ups.
The availability of infrastructure and utilities such as good roads, power,communication facilities, and lack of corruption and bureaucratic delays inobtaining such utilities encourage entrepreneurship.
Economic freedom in the form of favourable legislationand few hurdles tostart and operate businesses encourage entrepreneurship.
While most businesses accept laws related to the safeguard of labor rightsand the environment, some countries have retrograde laws that makecompliance very difficult and time consuming. Such legal hurdles create a barrier to entrepreneurship.
 How Economic Factors Influence Entrepreneurship:
The nature of the economy is a major factor that influencesentrepreneurship.
The general purchasing power of the people, manifested by income levelsand economic prosperity of the region, plays a major role in the success of entrepreneurial ventures.
During times of economic slowdown or recession, the purchasing power declines and people remain reluctant to invest, affecting entrepreneurshipadversely.

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