The document discusses factors that affect entrepreneurial growth, including economic factors like capital, raw materials, labor, and market as well as non-economic factors like social and psychological factors. It also discusses entrepreneurial competencies, which are the combination of an individual's knowledge, skills, and motivation that allow them to outperform others. Higher learning institutions play an important role in developing these competencies through entrepreneurship education programs and workshops.

1. UNIT-2
Factors Affecting
Entrepreneurial Growth

2. ECONOMIC FACTORS
 Capital
 Raw Material
 Labour
 Market
The major thing that impact entrepreneurship hugely is economy that includes things
like overhead facilities, capital availability, labor & skills, and risk among others. Having
a good set of economic factors not only help in reducing product cost but also help to
boost profit.
The factors which promote economic development of the
country are the same factors which promote
entrepreneurship.

3. CAPITAL-
 Life-blood of organisation
 Helps to pool together the factors of production
 Lubricant in process of production
LABOUR
 Quality is more important than quantity.
 Cheap labour holds limited mobility
RAW MATERIALS
 Raw materials to run organisation
 Technological inventions substituted the shortage of raw materials
MARKET
 Market size and composition affects entrepreneurship.

4. NON-ECONOMIC FACTORS
Social Factors
 Legitimacy of Entrepreneurship
 Social Mobility
 Marginality
 Security
Psychological Factors
 Need Achievement
 Withdrawal of Status and Respect
Even though economic factors are essential factors yet they alone are
not enough for the growth and development of the entrepreneurship.
Non- economic factors also play important role.

5. Legitimacy of Entrepreneurship
The non-economic factors focus more on the role of norms and values of
socio-cultural setting in the growth of entrepreneurship.
Social Mobility
Social mobility is the ability of an individual to shift himself from one status to another
on the social hierarchy.
Marginality
Social marginality describes the state of being excluded from social groups or society.
Security
Sometimes security is also considered as the crucial element inpromoting
entrepreneurship.

6. MOTIVATION
 Motivation is the complex force that keeps a person at work in an organisation.
Motivation is something that moves a person to action and continues him in the
course of action.

7. Internal Factors
 Willingness to do something new
 Educational Background
 Ability to act independently
 Achievement of goals set in life
External Factors
 Assistance and support from government and others
 Availability of raw material
 Promising demand for the product
 Encouragement from big enterprises

9. ENTREPRENEURIAL COMPETENCIES
A job competence is the combination of an individual’s characteristic features like
knowledge, skills, motive and so on, which she/he uses to outperform others.
Thus, the qualities of an entrepreneur which helps them to perform well are the
‘entrepreneurial competencies’ or ‘traits’.
Entrepreneurial competencies-
1. Knowledge
2. Skill
3. Motive

10. KNOWLEDGE-
Innovation is possible only through knowledge. The inventor or originator of the idea that
led to the knowledge or vision of something new.
Thus, inventions deal with new processes, or new technical knowledge. In a simple way,
knowledge means collections of information and retention of facts that an individual stores
in some parts of his brain.
SKILL
Skill is the ability to demonstrate a system and sequence of behavior that are functionally
related to attaining a performance or goal. An entrepreneur is required to have certain
skills and these skills also constitute his leadership qualities.
MOTIVE
If the entrepreneur is to succeed and build an effective organization to excel in global
competitiveness, he should be motivated as well as motivate the team. “The ability to
keep yourself and your team motivated is very important because it has a direct
impact on individual and organizational productivity,”

11. Process of Developing Entrepreneurial
competencies
Competency
Recognition
Self-
assessment
Competency
Application
Feedback

12. Higher learning Institutions
Higher learning institutions are those institutions which prepare
individuals to become professionals in different fields like medicine,
business, law, music etc.
Role of Higher Learning Institutions-
 Universities and institutions provide entrepreneurship
education in order to develop capabilities.
 Create awareness and motivation
 Provide training to students
 Develop entrepreneurial ability
 Channel for industry linkages
 Play role of knowledge transfer

13. Importance of Workshops
 Facilitates to learn
 Provides opportunities
 Socialize with new people
 Provides valuable advices
 Identify best opportunities
 Understand best business models
 Increase knowledge
 Build network