Entrepreneurship as Innovation and Problem Solving — Entrepreneurship STD 11 Commerce — Question

Economic Environment: All entrepreneur need some important prerequisites to start an enterprise, they are capital, labour, raw material and market. If all these factors of production are easily available to an entrepreneur in an environment, then it will give a natural support to him and easily he can promote entrepreneurship and contribute to economic growth of the country. But, if any of these or all of these factors are either not available or any of them are of inadequate quality or less in quantity, they can become barriers to entrepreneurship.
For instance:

1. If a prospective entrepreneur does not have access to capital for setting up his/ her new enterprise, he or she will feel discouraged to proceed further.
2. If capital is available but at an exorbitant rate of interest, it will also discourage entrepreneurship. In olden days it was only due to greedy money-lenders that many people were not able to start their own business.
3. Another problem is the availability of labour. However, if the labour is not productive, it will in itself become a barrier.
4. If labour of high productivity is not available at reasonable cost, it will inhibit entrepreneurial activities.
5. In the labour market, if labour climate is unreliable and is fraught with indiscipline and selfishness then definitely it can discourage entrepreneurs.
6. Cut-throat competition in the market.
7. Lack of availability of raw materials in desired quantity and quality and availability of raw-materials at high prices.
8. Problem of infrastructure to transport raw-materials to the factory.
9. Inaccessible market for the finished goods can become a serious barrier to entrepreneurship.