Entrepreneurship

By
Beenish Qureshi
Visiting Faculty
 Topic:
Factors Effecting Entrepreneurship
• As much appealing the idea of entrepreneurship may seem, there are a few factors to be
kept in mind before choosing when and where to start your business. Some of the factors
that affect entrepreneurship are:
• Political Factors
• Legal Factors
• Taxation
• Capital Availability
• Labor and raw materials
 Political Factors

• The market in a place can be capitalistic, communistic or a mixture of both. Capitalism

requires innovation while communism requires entrepreneurs and the political class to be
well connected with each other. Ideally, a country should be capitalistic for entrepreneurship
to flourish in the region.
 Capitalism

• Capitalism is an economic system in which private individuals or businesses own capital

goods.
 Communism

• Communism is a political and economic ideology that positions itself in opposition to liberal
democracy and capitalism, advocating instead a classless system in which the means of
production are owned communally and private property is nonexistent or severely
curtailed.
 Legal Factors

• The strength and fairness of the judicial system in a country has a big role to play in the
quality of entrepreneurship. This is because entrepreneurs in many cases might require the
courts to enforce the contracts agreed between two parties. But in many countries, such
contracts are not enforced properly, and this risk prevents the development of
entrepreneurship in those countries.
 Taxation

• Governments sometimes resort to excessive taxation as they adopt the policy of taking
from the rich and giving it to the poor. However, the basic principle of entrepreneurship
believes in the survival of the fittest and the excessive taxation rule contradicts it. Hence,
entrepreneurs want to set up businesses in places where there is very little interference
from the government on taxation
 Capital Availability

• Capital is the first requirement to start risky ventures and they might also require instant
capital to scale up the business once an idea becomes successful. Therefore,
entrepreneurship helps the economies to grow in those countries where there is a well-
developed system of providing capital at every stage i.e. seed capital, venture capital,
private equity as well as stock and bond markets.
 Labor and Raw Material

• Availability of skilled labor and required raw materials at reasonable prices are an important
factor for the launching of a business venture in a region. Countries like India, Bangladesh
and China have witnessed a huge rise in entrepreneurial activities because of the labor
markets being favorable for them.
 Business incubators and Business Accelerators

• A business incubator is a company that helps new and startup companies to develop by
providing services such as management training or office space. It is a tool for Economic
Development.
• A business accelerator is a program that gives developing companies access to
mentorship, investors and other support that help them become stable, self-sufficient
businesses.
Thankyou