Metodología 1 Contexto

What makes some entrepreneurs tick while others fail? Why do people in some cultures and regions display a better entrepreneurial spirit and skills compared to people in other cultures or areas? This section will discuss the major cultural, political and economic factors influencing entrepreneurship.

3.2.1 How Cultural Factors Influence Entrepreneurship

Culture refers to the customary practices and beliefs that have a significant impact on the basic values, perceptions, preferences, and behaviour of people. Culture and entrepreneurship intervene in many ways as follows:

 People who traditionally engage in business have a pro-business attitude and disdain taking up salary job and working as an employee of an organization.

 Many people fall outside the establishment and remain unsuited for the traditional job market due to a strong culture of independence or other reasons.

 Business school students come under the missionary zeal of teachers who exhort them to become entrepreneurs even if the opportunity cost is very high.

 The culture of consumerism where people desire material goods encourages entrepreneurship within the area as returns from a business become more than returns from a job.

 People engaged in jobs and other services pressure their children to find secure jobs and crush their entrepreneurship spirit at a very tender age.

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 A culture of thrift where people spend less and save for a rainy day discourages entrepreneurship within the local community as the returns from a business become less attractive compared to returns from a job.

 In cultures where people are risk averse and do not attach much importance to hard-work and perseverance, such people are generally not willing to dabble into entrepreneurship.

 In a culture or community where the society honours teachers and scholars greatly, children grow and aspire to become teachers and take up paid jobs too.

Our educational curriculum needs to be revolutionized in such a way that the system will be in position to produce graduates who will establish businesses and become job creators rather than job takers. We want our university and polytechnic graduates to become self-employed rather than self-ready for employment for the economy to grow and the standard of living of the populace to rise. Until there is a u-turn in our value system where people are hailed for owning their own business rather than roaming the streets in search of paid jobs that are not there, true economic growth will continue to elude us (Obi, 2015).

3.2.2 How Political Environment Supports or Suppresses Entrepreneurship

The following are some of the ways in which the political environment influences entrepreneurship:

 Unstable political climate where government policies change frequently discourages business as investors fear and doubt the safety and security of their investment.

 Government support to economic development through infrastructural development, provision of industrial parks, and the like all encourage entrepreneurship.

 High taxes that make inroads into business returns usually discourage entrepreneurs. On the other hand, tax holidays and government infant industry protection policies encourage business start-ups.

 The availability of infrastructural facilities and utilities such as good roads, regular power supply, communication facilities and absence of corruption and bureaucratic delays in obtaining such utilities encourage entrepreneurship.

 Economic freedom in the form of favourable legislation and few hurdles to start and operate businesses encourage entrepreneurship.

 While most businesses accept laws related to the safeguard of labour rights and the environment, some countries have retrograde laws that make compliance very

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difficult and time-consuming. Such legal hurdles create a barrier to entrepreneurship.

3.2.3 How Economic Factors Influence Entrepreneurship

The nature of the economy is a major factor that influences entrepreneurship. Some of these economic factors are discussed below:

 The general purchasing power of the people, manifested by income levels and economic prosperity of the region, plays a major role in the success of entrepreneurship ventures.

 During times of economic slow-down or recession, the purchasing power declines and people remain reluctant to invest thus affecting entrepreneurship activities adversely.

 In a subsistence economy, most of the people are engaged in agriculture, consuming most of their output and realizing little earnings from the sale of their surplus produce to other local dwellers. Entrepreneurial opportunities are limited in a subsistence economy.

3.2.4 How Entrepreneurial Skills Affect Entrepreneurship

All other factors notwithstanding, the success of an entrepreneurial venture depends on the entrepreneur. The entrepreneur is the leader and driver of the venture, and requires the following skills and orientation for success:

 Hard-work and persistence

 Ability to manage and minimize risk

 Ability to draw up a comprehensive business plan, and having a contingency plan ready.

 A strong need-orientation that provides the inclination to achieve things.

 Honesty and intelligence on the part of the entrepreneur.

 Ability to withstand pressure in times of great need.

 Abstention from high taste and high life

 A good entrepreneur should have good human relations.

With the collapsing trade barriers and globalization of economic activities, there is, today, greater opportunities for entrepreneurship especially in developing countries.

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