Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
404 views

Theories of Entrepreneurship

The document discusses several theories of entrepreneurship, including economic, exposure, and political system theories. The economic theory proposes that entrepreneurship thrives under certain favorable economic conditions. The exposure theory suggests that exposure to new ideas leads to entrepreneurship through creativity and innovation. Finally, the political system theory argues that governments can promote entrepreneurship through infrastructure, laws, incentives and other supportive policies.

Uploaded by

Laksha Anand
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
404 views

Theories of Entrepreneurship

The document discusses several theories of entrepreneurship, including economic, exposure, and political system theories. The economic theory proposes that entrepreneurship thrives under certain favorable economic conditions. The exposure theory suggests that exposure to new ideas leads to entrepreneurship through creativity and innovation. Finally, the political system theory argues that governments can promote entrepreneurship through infrastructure, laws, incentives and other supportive policies.

Uploaded by

Laksha Anand
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 9

Theories of Entrepreneurship

Economic Theory of Entrepreneurship


• Many economists revealed that entrepreneurship and
economic growth will take place in those circumstances
where particular economic conditions are in favour of the
business environment.
• The main advocates of this theory were Papanek and
Harris. According to them economic incentives are the
main forces for entrepreneurial activities in any country.
• There are a lot of economic factors which promote or
demote entrepreneurship in a country.
Economic Theory of Entrepreneurship
These factors are:
(a) The availability of bank credit
(b) High capital formation with a good flow of savings and
investments
(c) Supply for loanable funds with a lower rate of interest.
(d) Increased demand for consumer goods and services
(e) Availability of productive resources.
(f) Efficient economic policies like fiscal and monetary policies
(g) Communication and transportation facilities
Economic Theory of Entrepreneurship
• Economic development was the result of rationalization of technology and
accounting systems and the acquisition of capital and its productive use
was the main theme of the Weberian thesis.
• Some scholars have tried to explain the growth of entrepreneurship in
terms of regional economic factors, i.e., industrial support to environment
in these regions.
• A question which was analysed by a researcher is: “Since Jains and
Vaisyas were in every corner of India, why was it that only Marwari and
Gujarati Vaisyas and Jains gave lead in entrepreneurship, mostly in
Gujarat”.
• This analysis revealed that Gujarat had environment favourable to business
and industry. Thus, it can be concluded that the industrial climate may
have a very significant impact on the response of entrepreneurs. However,
the group factors, as emphasized by various studies, cannot be ignored
altogether.
Exposure Theory of Entrepreneurship
• Many studies have shown that it is the exposure to new ideas and
opportunities towards creativity ad innovation which leads to create
a new venture. There is adequate empirical evidence to prove its
validity.
• Tripathi has observed that exposure to new ideas and values were
the common factor between Parsi and Hindu entrepreneurs, which
led them to entrepreneurship. Education have played very
significant role in exposing the Indian entrepreneurs to Western
ideas leading them to entrepreneurship.
• It is also the differential responses of the social groups to
opportunities provided by the commitment of the political system to
industrialisation that has led the process of entrepreneurial spread.
Exposure Theory of Entrepreneurship
Political System Theory of Entrepreneurial
Growth
• Political system can crate adequate infrastructure,
favourable laws, favourable taxation system and
procedures, provide incentives and subsides, security to
entrepreneurs, create promoting policies and can
encourage people towards entrepreneurship.
• Government can also build supporting system for
potential entrepreneurs. Thus, the commitment of
political system can contribute significantly towards
entrepreneurial development.
Political System Theory of Entrepreneurial
Growth
Political System Theory of Entrepreneurial
Growth
• According to Hoselitz, Japanese entrepreneurs could flourish
because their political system was able to properly integrate with
various sectors such as the industrial and agricultural, large, small
and handicraft industries, labour intensive and capital intensive
technology, traditional and modem social structure. Also, there was
no colonial disruption.
• According to Boulding “political structure was the decisive factor in
entrepreneurial growth of France and Russia. But before 1917 it did
not flourish because the creative ability of masses could not find
expression. Hoselitz argued that France lagged behind
entrepreneurially, because his political system did not provide
sufficient incentives and security to entrepreneurs.

You might also like