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 The emergence and development of entrepreneurship is

not a spontaneous one but a dependent phenomenon of
economic, social, political, psychological factors often
nomenclature as supporting conditions to entrepreneurship
development.

 These conditions may have both positive and negtive

influences on the emergence of entrepreneurship.

 Positive influences constitute facilitative and conducive

conditions for the emergence of entrepreneurship, whereas
negative influences create inhibiting milieu to the emergence
of entrepreneurship.

 This chapter aims at discussing some of the major conditions

which influences the emergence of entrepreneurship in an
economy.

 For analytical purpose these conditions/factors are grouped

and discussed under two categories, viz., economic factors
and non-economic factors.

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From a strictly economic viewpoint, it can be said that same

factors which promote economic development account for the emergence
of entrepreneurship also.

CAPITAL Ê

 ¬apital is one of the most important prerequisites to establish an

enterprise.
 Availability of capital facilitates the entrepreneur to bring
together the land of one, machine of another and raw material
of yet another to combine them to produce goods.
 ¬apital is, therefore, regarded as lubricant to the process of
production.
 Leading entrepreneurs· accumulated experience suggests that
with an increase in capital investment, capital-output ratio also
tends to increase.
 This result increase in profit which ultimately goes to capital
formation.
 This suggests that as capital supply increases, entrepreneurship
also increases.
 France and Russia exemplify how the lack of capital for
industrial pursuits impeded entrepreneurship and an adequate
supply of capital promoted to it.
LabourÊ

 The quality rather quantity of labour is another factor which

influences the emergence of entrepreneurship.
 It is noticed that cheap labour is often less mobile of=r
immobile.
 And, the potential advantages of low cost labour are negated
by the deleterious effects of labour immobility.
 Adam Smith also considered division of labour as an
important element in economic development.
 According to him, division of labour which itself depends
upon the size of the market leads to improvement in the
productive capacity of labour due to an increase in the
dexterity of the labour.
 Notwithstanding, it appears that the labour problem clearly
does not prevent entrepreneurship for emerging.
 For examples, the problem of low-cost immobile labour can be
circumvented by plunging ahead with capital-intensive
technologies, as Germany did.
 It can be dealt by utilizing labour-intensive method like
Japan, for example.
 By contrast, the disadvantage of high cost labour can be
modified by introduction of labour-saving innovations as was
done in the U.S.A.
 Thus, it appears that labour can be solved more easily than
capital.

Raw materials:

 The necessity of raw materials hardly needs any emphasis for

establishing any industrial activity and, therefore, its
influences in the emergence of entrepreneurship.
  In the absence of raw materials, neither enterprise can be
established nor an entrepreneur can be emerged.
 For examples, in Japanese case, witnesses that lack of raw
material clearly does not prevent entrepreneurship from
emerging but influenced the direction in which
entrepreneurship took place.
 In fact, the supply of raw materials is not influenced by
themselves but becomes influential depending upon other
opportunity conditions.
 The more favourable these conditions are, the more likely is
the raw material to have its influence on entrepreneurial
emergence.

Ôarket:

 The fact remain that the potential of market constitutes the

major determinant of probable rewards from entrepreneurial
function.

 The size and composition of market both influence

entrepreneurship in their own ways.
 Practically, monopoly in a particular product in a market becomes
more influential for entrepreneurship than a competitive market.
 However, the disadvantage of a competitive market can be
cancelled, to some extent, by improvement in some transportation
system facilitating the movement of raw materials and finished
goods and increasing the demand for producer goods.
 Wilken claims that instances of sudden rather than gradual
improvement in market potential provide the clearest evidence of
the influence of this factor.
 He refers to Germany and Japan as the prime examples where
rapid improvement in market was followed by rapid
entrepreneurial appearance.
  Thus, it appears that whether or not the market is expanding and
the rate at which it is expanding are the most significant
characteristic of the market for entrepreneurial emergence.

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Sociologists and psychologists advocate that economic factors
may be necessary conditions, but they are not sufficient conditions for the
appearance of entrepreneurship. They view that the influence of economic
factors on entrepreneurial emergence largely depends upon the existence
of non-economic factors i.e., social and psychological factors in the
society.


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Social Conditions:
 Legitimacy of entrepreneurship:

 The proponents of non-economic factors give emphasis to the

relevance of system of norms and values within a social-cultural
setting for the emergence entrepreneurship.
 In professional vocabuary, such system is reffered to as the
¶legitimacy of entrepreneurship· in which the degree of approval
and disapprovalgrantede entrepreneurial behaviour influences its
emergence and chracteristics if ti does emerge.
 While Schumpeter recognises the importance of such legitimacy in
terms of appropriate social climate for entrepreneurship, ¬ochran
calls it cultural themes and sanctions.
 The social status of those playing entrepreneurial role has been
considered one of the most important contents of entrepreneural
legitimacy.
 To increase the legitimacy of entrepreneurship, some scholrs have
proposed the need for change in the traditional values, which are
assumed to be opposed to entrepreneurship.
 Instead, they submit a re-interpretation of the traditional valuesor
its synthesis with the newer values to increase the entrepreneurial
legitimacy.

Social Ôobility: