02 What is an entrepreneur?

An entrepreneur is an economic agent that acts in the allocation of resources raw materials intermediate goods physical, human, and social capital Either to increase the efficiency of production of existing commodities, or to create new products. A study of socio-political and economic environment has a great social and economic significance to the growth of entrepreneurship. Modern business is treated as a social and economic institution and is affected by the political, social and economic forces. The political environment, industrial policy, licensing policy, foreign exchange regulations, banking policy, technological development and social change form the framework within which an enterprise has to work. It is for these reasons that all business plans must be based on the immediate environment. An entrepreneurial plan cannot be framed and finalized for its implementation without its relevance to the political, social, economical and technological requirements. In fact, it is the environment that regulates entrepreneurial activities. So all these environments which affect the entrepreneurial development can be called the Factors affecting entrepreneurship. Basically these factors can be categorized into 4 groups1. Individual factor 2. Psychological factor 3. Environmental factor 4. Socio-cultural factor Individual factorsOccupational background- occupational background plays a very significant role in entrepreneurial development. The person engaged in some occupation gains a very good knowledge of his field. And then he tries to start some new business in the same field. Educational background-Education, entrepreneurship and development are interrelated. Education is the best means of developing mans resourcefulness which encompasses different dimensions of entrepreneurship. Thus, formal education is always considered an important asset of an individual in building an occupational career. It makes available more skills necessary to entrepreneurial endeavor. Parental background-sometimes children continue their family business which is given by their parents. They try to bring in some changes in the existing business in the form of some new technology, new process, new product etc. they are called second generation entrepreneur. Psychological factors Independence

 Challenge Dream desire Family background Market opportunity Idea driven Need for achievement Profit making Environmental factorsA complex and varying combination of financial, institutional, cultural, and personality factors determine the nature and degree of entrepreneurial activity at any time. At any point of time, the entrepreneurs derive meanings from environment prevailing at that time and try to adapt and change the environment to suit their needs. The environment, particularly the external environment is dynamic. It keeps on changing and affects different organizations to a varying extent. The impact of environment on the organization depends largely on the degree to which the organization depends on the environment and organizational response to environmental changes. All the factors outside and inside the organization interact and affect the performance of the organization. Entrepreneurship is environmentally determined. The most essential for entrepreneurial growth is the presence of the favorable business environment. A healthy business environment requires active social and cultural behavior of the people, efficient economic conditions, helpful and motivating government policies, etc. Basically environmental factors can be studied under 4 categoriesPolitical environmentPolitical environment affects the entrepreneurial growth and accelerates the process of business activity. Law and order is of high priority, followed by government policies in regard to the promotion of entrepreneurship, followed by incentives, encouragement and right institutional structure will go a long way in fostering entrepreneurship. Economic environmentEntrepreneurial growth and development is also governed by economic environment. It encompasses the wide spectrum of items, namely, land, availability of raw material, skilled labor, infrastructure, machinery, capital and so on. Shortage of raw materials can much adversely affect the entrepreneurial environment. Shortage of raw materials, inferior quality, and high price resulting in high cost of production are some of the major factors. Technological environmentTechnology represents the application of scientific knowledge for practical purposes. Technological advancement has become a catalytic agent in the promotion of entrepreneurship growth of industrial and allied services. It creates resources and brings in cultural changes as well as quality of life. Technological advancement continues to give fillip to entrepreneurship in multi facet manner, affecting the life of the entrepreneurs as well as the common man.

Legal environmentThere are various rules and regulations applicable to different groups of industries, for various purposes. That may be regarding registration, licensing, pollution, location, acquisition, payment of wages and labor related laws, pollution and environmental rules, laws relating to organization, product, patent, resource and taxes.