What factors facilitate entrepreneurial development in an economy?

      

Highlight factors that facilitate entrepreneurial development in an economy.

  

Answers


Maurice
(i) Political stability: Political stability and general peace in an economy always lead to increased levels of entrepreneurial development because whenever there is general peace in the economy people can trade peacefully.

(ii) Natural factors: Like rainfall,temperatures,earthquakes, pests, wind and drought usually influence the type of businesses carried out in an area. Whenever there is adequate rainfall businesses dealing with horticultural practices will be established, whereas areas that experience long spells and constant pest outbreak may have limited businesses for lack of the output/ farm produce to trade.

(iii) Good infrastructural development in an economy: Whenever there is good transport network, developed water systems, proper buildings and good security in a country, the levels of entrepreneurial development will increase greatly.

(iv) Favourable government policy: Whenever the government increases taxes on the factors of production, the rate of entrepreneurial development decreases because, taxes usually reduce the profits of the entrepreneurs and whenever the government lowers the taxes on the factor inputs a large number of entrepreneurs usually join business practice.


(v) Increased levels of education and skills in the economy: Wherever people in an economy get educated they acquire the relevant skills and knowledge, training and experience and can therefore engage in entrepreneurial practices in the economy.

(vi) Availability of market for goods and services: Availability of adequate market in goods and services always acts as a 'pull'. Factors to the growth of businesses, as more entrepreneurs will start businesses in order to provide goods and services to the already existing market.

(vii) Availability of resources: Availability of adequate resources that is, labour, capital, physical resources and modern technology always facilitates entrepreneurial development in an area.

(viii) Reduced levels of competition: Entrepreneurs will start businesses in areas where the levels of competition are low in order to attain higher profits.



maurice.mutuku answered the question on August 4, 2017 at 09:25


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