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

The development of entrepreneurship is often influenced by factors such as economic, social, cultural and political. These factors are collectively referred to as environmental factors. These factors may have both the positive as well as negative influences on the emergence and growth of entrepreneurship. The negative influence of these factors is referred to as 'environmental barriers'.The various types of environmental barriers are discussed below:

1. Economic barriers: For the development of an enterprise, an entrepreneur needs factors of production such as land, labour, capital, material, market, etc. Thus, an environment, where all these factors are easily available to the entrepreneur, will naturally support and promote entrepreneurship. On the other hand, if any of these factors are not available or are of inadequate quality and quantity, then they can become barriers to entrepreneurship.
2. Social barriers: Social factors such as caste structure, mobility of labour, customer needs, cultural heritage, respect for senior citizens, values of an individual, etc, have a far reaching impact on business. e.g. in India, attitudes have changed with respect to food and clothing as a result of industrialisation, employment of women in factories and offices, and the increased level of education. This has resulted in the growth of food processing and garment manufacturing units and is witnessing the emergence and growth of a new class of entrepreneurs who deal in readymade shirts, instant food, vending machines for tea and eatables, etc. But at the same time, these changing factors have led to the decline of the Indian handicraft industries such as khadi, pottery, etc.
3. Cultural barriers: Every society has its own cultural values, beliefs and norms. An entrepreneur will have to keep in mind the cultural reference of the region that he/ she is going to cater to, as this will enable him/her to get a quicker acceptance in that region. If, however, he/ she fails to do so, then it will definitely act as a cultural barrier.
4. Political barriers: It provides the legal framework within which business is to function. This environment is influenced by political organisations, stability at the centre, government's intervention in business, constitutional provisions, etc. The viability of business depends upon the ability with which an entrepreneur can meet the challenges arising due to the above factors. An entrepreneur's inability to deal with these factors will result in a barrier to entrepreneurship.