ENTREPRENEURIAL ENVIRONMENT

The entrepreneurial equation

Economic factors + psychological factors + sociological factors + behaviourial factors + entrepreneurial
environmental factors = ± levels of entrepreneurial activities in the country (community, province etc.)
The entrepreneurship economic, psychological, sociological and behavioural theories respectively have
explained in detail the factors contained in the inner circle and the middle circle. The factors on the outer
circle constitute a typical entrepreneurial environment in Zambia. In most cases, it constitutes the policies
that promote entrepreneurship in Zambia. The entrepreneurial environment should not be confused with
the business environment which encompasses the macro or general environment – assessed using PESTL,
and the industrial environment – assessed by Porters five forces.

Entrepreneurial environment
Innovation infrastructure Political ideology
Education policy

Sociological factors
Sci Taxation policy
enc Socie
tal St
e, at
Co tec value Economic factors
s, us
st hno (Arbitrage, decision making under
religi wi
of log uncertainty, alertness to opportunity, factors th
doi ous of production, innovation)
y& dr
ng belief Psychological factors
inn , a
bus ova (Need for achievement, internal locus of w
custo control, creativity, innovation) MS
ine tion ms, ME
ss poli Behaviourial factors
(Social, political & economic structures S
cy poli
present that reward or reinforce
pol entrepreneurial behaviours) cy
icy Law and order
Fin
anc
ial
pol
icy Government tender policy

Whilst economic psychological, sociological and behavioural factors are aimed at increasing the number
of individual with the right skill, knowledge, characteristics, to take up entrepreneurship as a career, the
entrepreneurial environment provides supporting institutions and resources for the entrepreneurs to realize
their dreams. Thus the presence or absence of entrepreneurial environment makes it easy or difficult for
entrepreneurs to set-up new or expand existing business.