The industrial activity is dependent upon a complex and varying mixture of financial, institutional, cultural, legal and personality factors. A business enterprise does not exist in vacuum but it exists depending upon a number of outside factors called environment.
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The environment for emergence of entrepreneur mainly consists of
- Economic Environment
- Social Environment
Economic Environment:
Economic environment exert a great deal of influence on entrepreneurship. It denotes all those factors which help in functioning of business enterprise. While considering economic environment, the following factors are to be taken into consideration.
- The general economic conditions prevailing in the country.
- The economic system operating in the country.
- The state of economic planning.
- The state of availability of economic infrastructure.
- Per capita Income of the people.
- Provisions of capital formation.
- Availability of labour force in the country.
Social Environment:
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Social environment is a comprehensive concept because it includes total social factors within which a business enterprise operates. Within the coverage of social environment, it includes people’s attitude, family back-ground, religion and education. The followings are some of divisions of social environment.
- Pluralistic Society
- Predominance of masses
- Poverty of masses
- Illiteracy an Ignorance
- Presence of different types of caste and casteism
- Racial diversity
- Presence of communalism and communal tension
- Problems of social communication
- Presence of technological factors.