Entrepreneurial Environment

Entrepreneurial Environment

The term entrepreneurial environment refers to a combination of

factors that plays a role in the development of entrepreneurship.

Entrepreneurs need to understand the business environment,

including growth prospects, political stability, bureaucratic set ups,
and judiciary effectiveness in the region in which their business
operates.
 Entrepreneurial Environment

It is observed that countries having policies encouraging a

minimalist approach to rules and regulation, offering incentives like
tax benefits and subsidies, and providing training, development and
counselling services to starting , supporting and sustaining business
ventures are often perceived as having an entrepreneurship-friendly
environment.

Factors such as the availability of financial resources and investment

in research and development increases the rate of new venture
creation.
 Global Entrepreneurship Environment

The Global Entrepreneurship Development Index (GEDI) of 71 counties for the year
2010 is exhibited in Table The index shows that entrepreneurship and the degree
of the countrys development are correlated. GEDI focuses on three broad areas:

1. Entrepreneurial attitude (How society sees entrepreneurship)

2. Entrepreneurial activity (to improve the quality of human resources

and technology efficiency)

3. Entrepreneurial aspiration (how much entrepreneurial activity is

being directed toward innovation)
 The Global Entrepreneurship
Development Index Rank of Countries
GEDI Country GDP GEDI Country GDP
Rank Rank

1 Denmark 35,890 19
7 Slovenia
Switzerland 24,913
40,183
2 Canada 34,926 20
8 Korea
Norway 25,481
49,014
3 United States 44,474 21
9 Israel
Iceland 25,863
35,490
4 Sweden 36,358 22
10 Austria
Netherlands 36,836
38,083
5 New Zealand 26,773 23
11 Hong Kong
Australia 39,089
34,073
6 Ireland 44,402 24
12 Belgium
United Arab 39,900
34,584
Emirates
The Global Entrepreneurship Development
Index Rank of Countries
GEDI Country GDP GEDI Country GDP
Rank Rank

13 Finland 33,869 18 France 33,412

14 United Kingdom 34,726 19 Solvenia 24,913

15 Singapore 39,508 20 Korea 25,481

16 Germany 34,512 21 Israel 25,868

17 Puerto Rico 20,223 22 Austria 36,836

The Global Entrepreneurship Development
Index Rank of Countries
GEDI Country GDP GEDI Country GDP
Rank Rank
23 Hong Kong 39,089 28 Spain 31,241

24 United Arab 39,900 29 Japan 33,288

Emirates
25 Czech Republic 22,110 30 Saudi Arabia 23,428

26 Chile 13,609 31 Malaysia 12,681

27 Italy 30,248 32 Latvia 15,574

The Global Entrepreneurship Development
Index Rank of Countries
GEDI Country GDP GEDI Country GDP
Rank Rank
33 Portugal 22,595 38 Croatia 15,599

34 Greece 28,024 39 Peru 7,558

35 Uruguay 10,844 40 China 5,087

36 Argentina 12,769 41 Colombia 8,336

37 Poland 14,095 42 South Africa 9,565

The Global Entrepreneurship Development
Index Rank of Countries

GEDI Country GDP GEDI Country GDP

Rank Rank
43 Turkey 12,747 49 Macedonia 9,632

44 Mexico 14,135 50 Egypt 5,383

45 Dominican Republic 3,459 51 Jordan 5,092

46 Indonesia 3,459 52 Panama 11,947

47 Hungary 18,639 53 India 2,656

48 Romania 13,217 54 Brazil 9,376

The Global Entrepreneurship Development
Index Rank of Countries

GEDI Country GDP GEDI Country GDP

Rank Rank
55 Venezuela 11,333 60 Jamaica 6,848

56 Thailand 7,974 61 Algeria 7,887

57 Russia 14,121 62 Serbia 10,477

58 Tunisia 14,121 63 Kazakhstan 10,477

59 Moricco 4,248 64 Bosnia and Herzegovina 8,077

The Global Entrepreneurship Development
Index Rank of Countries
GEDI Country GDP GEDI Country GDP
Rank Rank
65 Iran 10,625 70 Philippines 3,186

66 Ecuador 7,597 71 Uganda 918

67 Bolivia 4,242

68 Syria 4,476

69 Guatemala 4,661
Global Entrepreneurship Index(2016)
RANK Country GDP GEI
1 United States 51341 86.2
2 Canada 41894 79.5
3 Australia 42831 78
4 Denmark 41991 76
5 Sweden 43741 75.9
6 Taiwan 40393 69.7
7 Iceland 41250 68.9
8 Switzerland 54698 67.8
9 UK 37017 67.7
10 France 37154 66.4
98 India 5238 24.9
 Business Climate in India

Top Ranking 2012 2011 Change in Rank

Rank Rank

Starting a Business 166 166 No Change

Dealing with Construction Permits 181 181 No Change

Getting Electricity 98 109 +11

Registering Property 97 96 -1

Getting Cerdit 40 37 -3
 Business Climate in India

Top Ranking 2012 2011 Change In Rank

Rank Rank

Protecting Investors 46 44 -2

Paying Taxes 147 165 +18

Trading Across Borders 109 107 -2

Enforcing Contracts 182 182 No Change

Resolving Insolvency 128 140 +12

 Environmental Factors Affecting
Entrepreneurial Growth
Internal Factors: Educational background, occupational experience,
desire to do something pioneering and innovative, desire to be free
and independent and family background.

External Factors: Assistance from the government, financial

assistance from institutions, availability of technology or raw
materials, encouragement from big business units and heavy
demand for product.
 Factors Affecting Entrepreneurial Growth
and Development

Economic
Political
Legal
Social and Cultural
Psychological
Technological
 Economic Environment

Capital ( interest rate)

Labour( unskilled, cheap-training, )

Raw Material ( availability)

Market

Infrastructure
 Political Environment

Political Stability
Government policies Licenses, regulation, and bureaucracy
 Socio and Cultural Environment

Religion
Family background
Education
Social status
Values
Behavior acceptable within the society
 Psychological Environment

Achievement Motivation (David McClelland theory)

 Technological Environment

Advancement in information technology

Advancement in Information Technology Enabled Services (ITES)
Software technology
Hardware technology
Information and Communication Technology
 Creating a Favorable Environment for
Entrepreneurship

Entrepreneurship Education

Availability of Finance

Infrastructure
Technology

Governance and Reduction of Complex Bureaucratic Procedures

 Models of Entrepreneurial Development

Psychological Model
Sociological Model
Integrated Model
 Psychological Model
McClellands theory of Achievement Motivation
Theory of withdrawal of status respect
Internal-External Locus of Control Theory
 Sociological Model

Max Webers Theory of Religious Beliefs (Spirit of Capitalism and

Adventurous Spirit)

Hozelists Socio-Cultural Theory

Thomas Cohrans Theory of Entrepreneurial Supply

Frank W Youngs Theory of Group Level Pattern

 Integrated Model

Need for motive (achievement motivation)the dynamic which is

the main thrust behind entrepreneurial action.
Long-term involvement in thought and action to achieve the goal in
entrepreneurial activity
Personal, social, and material resources favourable to
entrepreneurial activity.
Socio-political system suitable for the establishment, development,
and expansion of an enterprise.
 McClelland's Theory of Entrepreneurial
Motivation

Need for Power (nP), or the drive to influence others and any given
situation.
Need for Affiliation (nAff), or the drive for interpersonal relationship.
Need for Achievement (nAch), or the drive to excel, advance, and
grow.
 Need for Achievement

They find achievement to be more important than reward.

They set their own goals, which are moderately challenging.
They pursue goals for which they can obtain feedback about their
success.
They are constantly competing with standards of excellence.
They have self-efficacy (belief in ones own ability) and an internal
locus of control (the belief that their actions affect outcomes).
 Thematic Appreciation Test (TAT)

The thematic appreciation test (TAT) is a projective psychological

test developed by the American psychologist Henry A. Murray and
the American psychoanalyst Christiana D. Morgan in the 1930s.
McClelland used the TAT as a tool to measure individual needs and
motivating factors in people. In administering TAT, an individual is
asked to look at a series of pictures for a short period of time and
describe what they think is happening in the picture. T
This is a test of imagination where a story for each picture is
spontaneously generated by the individual looking at it. This test is
administered on the assumption that the individual will illustrate their
own (presumably hidden) needs and motivations into the story they
generate.
The test also determines the individuals score for each of the three
needsneed for power, need for affiliation, and need for
achievement. The scores may be used to suggest the types of roles
the individual is well suited for
 Entrepreneurship Motivation Training
(EMT)- Objectives
To enhance the entrepreneurial spirit and improve the
entrepreneurial competence of the participants by emphasizing
motivation, planning and cooperative efforts.
To help the participants to examine their own self and relate their
images of themselves with their environment.
To make them aware about their own style of influencing people
and situations.
To enable them to recognize their creative and innovative potential
 EMT

Development a curriculum plan for EMT

Implementing EMT

Evaluating EMT
Developing a Curriculum Plan for EMT
The target group
Training need identification
Objectives
Duration
Content
Material required
Course calendar
Evaluation
 Implementing EMT

Choice of a trainer

Preparation of training material

Selection of the venue

 Evaluating EMT

Deciding on the criteria for valuation

Deciding on the level of evaluation

Deciding on the methods and process of evaluation

 Entrepreneurship Training Methods
Lecture Method
Participative Methods Conference, Seminar, Panel discussion,
Workshop, Buzz group, Syndicate method, Case method, Role
play, Simulation method, Laboratory method,
 The Process/Phases of Entrepreneurial
Development
Stimulatory Phase

Support Phase

Sustenance Phase