CHAPTER 2

COMPETENCIES OF
ENTREPRENEURSHI
P
ENTREPRENEURIAL
COMPETENCIES
PERSONAL ENTREPRENEURIAL
COMPETENCIES (PECs)_
The term “Entrepreneurial Competencies” refers
to the abilities or skills that should be possessed
by successful entrepreneurs in order to perform
entrepreneurial functions effectively.
 Entrepreneurial Competencies
McClelland and McBer (1985)

Initiative Systematic planning

Sees and acts on opportunities

01 06 Efficiency orientation

02 05
03 04

Persistence Information seeking

 Entrepreneurial Competencies
McClelland and McBer (1985)

Problem solving

Self-confidence
07 12 Use of influence strategies

08 11
09 10

Assertiveness Persuasion
 IMPORTANCE OF
ENTREPRENEURSHIP
 MINDMAP DIAGRAM
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Enterprising
Country
Allocate resources
productively
and efficiently

Importance
Create
wealth
Healthy
entrepreneurial
culture
Provide
avenues
How Entrepreneurship Impacts a Nation?
1. Providing leadership in the industrial
development

 An entrepreneur is the combination of two

skills – an ideal person and a manager

 There must be persons who have vision,

initiative and drive to utilize the resources.

 These qualities and abilities are combined

only in entrepreneurs.
2. Introducing innovations and changes

 Entrepreneur always looks for changes

 Entrepreneur not only combines the

factors of production but also introduces
new combinations of factors.

 Responds to changes and exploits it as an

opportunity.
3. Increasing productivity

 The entrepreneur allocates scarce

resources & co-ordinates the various
factors of production.

 An entrepreneur employs each factor in

the right proportion by using the best
technical devices, division of labour, etc.

 An entrepreneur tries to eliminate waste in

production.
4. Providing employment

 Entrepreneurship generates employment

and income.

 It also helps to reduce unemployment

which is the root of all socio-economic
problems.
5. Increasing the standard of living of the
people

 Entrepreneurs can contribute much to the

growth of national income of a country by
exploiting natural resources, creating
wealth and generating employment and
income.

 A country is said to have achieved

economic development only when its
people enjoy a higher standard of living.
FACTORS AFFECTING
ENTREPRENEURSHIP
FACTORS AFFECTING
ENTREPRENEURIAL GROWTH
Economic Factors

Entrepreneurial
Growth
Non-Economic
Government Action Factors
• Social Condition
• Psychological Factors
1. Economic factors

From a strictly economic viewpoint, it can be said that the

same factors which promote economic development
account for the emergence of entrepreneurship also.

Capital

Labour
Economic Factors
Raw Materials

Market
 Capital:
• Capital is one of the most important prerequisites
to establish an enterprise.
• Availability of capital facilitates the entrepreneur
to bring together the land of one, machine of
another and raw material of yet another to
combine them to produce goods.
• Capital is therefore, regarded as lubricant to the
process of production/render services.

 Labour:
• The quality rather quantity of labour in another
factor which influences the emergence of
entrepreneurship.
 Raw Materials:
• The necessity of raw material hardly needs any
emphasis for establishing any industrial activity
and therefore it influences the emergence of
entrepreneurship.
• In the absence of raw materials, neither any
enterprise can be established nor an entrepreneur
can emerged.
 Market:
• The fact remains that the potential of the market
constitutes the major determinant of probable
rewards from entrepreneurial function.
• The size and composition of market both influence
entrepreneurship in their own ways.
 2. Non-economic factors
Non-Economic factors

Social Conditions Psychological Factors

Legitimacy of Entrepreneurship Social Mobility Security Need Achievement

Social Conditions

• Legitimacy of Entrepreneurship: The proponents of non-

economic factors give emphasis to the relevance of a system
of norms and values within a socio-cultural setting for the
emergence of entrepreneurship.

• Social Mobility: Social mobility involves the degree of

mobility, both social and geographical, and the nature of
mobility channels within a system.

• Security: Security is a significant factor for entrepreneurial

development. If individuals are fearful of losing their
economic assets or of being subjected to various negative
sanctions, they will not be inclined to increase their insecurity
by behaving entrepreneurially.
Psychological Factor

 Need Achievement:
• If the average level of need achievement in a society
is relatively high, one would expect a relatively high
amount of entrepreneurship development in the
society.
3. Government action
• The government by its actions or failure to act also does
influence both the economic and non-economic factors for
entrepreneurship development.

• Any interested government in economic can help, through its

clear expressed industrial policy, promote entrepreneurship in
one way or other, by creating basic facilities, utilities and
services and by providing incentives and concessions.

• The government can provide the prospective entrepreneurs a

facilitative socio-economic setting. Such conductive setting
minimizes the risks which the entrepreneurs are to encounter.

• The supportive actions of the government appears as the most

conductive to the entrepreneurial growth.
Thanks!
Any questions?