Key objectives of social entrepreneurship :

 Addressing social needs:

Identifying and tackling significant social problems like poverty, healthcare
disparities, environmental degradation, or lack of education through
entrepreneurial ventures.
 Community empowerment:
Enabling communities to participate in solutions and improve their own lives
by providing opportunities and access to essential services.
 Social innovation:
Developing creative and innovative solutions to complex social challenges,
often involving new technologies or approaches.
 Sustainability:
Building long-term, self-sustaining business models that generate enough
revenue to cover costs and continue delivering social impact.
 Social value creation:
Prioritizing the positive impact on society as the primary goal, even if it
means sacrificing some profit potential.
 Scalability:
Designing solutions that can be expanded to reach a larger population and
create widespread social change.
 Ethical conduct:
Operating with high ethical standards and transparency in all business
practices.
Important points to remember:
 Dual focus:
Social entrepreneurship aims to achieve both social impact and financial
viability.
 Market-based approach:
Utilizing market mechanisms and business strategies to address social
issues.
 Collaboration:
Often involves partnerships with government, NGOs, and other stakeholders
to maximize impact.
Entreprenurial Attribute:
Risk-bearing

They choose moderate risk rather than play wild gamble. They, therefore,
undertake calculated risk which is high enough to be exciting, but with a fairly
reasonable chance to win.

Creative and Innovators:

Successful entrepreneurs are innovators. They constantly put their efforts in

introducing new products, new method of production, opening new markets
and reorganizing the enterprise. They always try not to be satisfied with
conventional and routine way of doing things, but always think of how they
can do them in a better way

Ability to mobilize resources:

Entrepreneurs must have the ability to marshal all the inputs to obtain the
end product.

Judgment:

Successful entrepreneurs have the ability to think quickly and make a wise
decision. This is possible because they have a plan, they have an economic
goal, they know what they want and they know what they can do

Vision

Successful entrepreneurs always keep one eye on the big picture. Vision is
about strategic planning

Passion

This is the most significant characteristic that every entrepreneur has. They
are successful because they love what they do.
Competitiveness

The numbers of companies formed are increasing every month and every
year, as every entrepreneur feels that they can do a much better job than
others.

Flexibility

An entrepreneur has to be able to adapt to change and solve problems as they

arise

Disciplined

Successful entrepreneurs always focus their energy on making the business

work, and for eliminating the distractions or obstacles to their goals.

Factors affecting Entreprenurship:

1.Economic Factors
2.Social Factors
3.Psychological Factors
4.Government/Political Factors

Economic Factors

Economic factors are those which contribute in the economic development

of the economy. From economic point of view, these factors
create conducive environment for the economic development of country and
also account for the establishment and development of entrepreneurship.
These factors actually provide the economic security
and favourable environment to an enterprise. Some of the major economic
factors that affect entrepreneurship growth are discussed as follow:

1 Capital: Capital or finance is the life blood of any enterprise or business

and one of the major prerequisite to start an entrepreneurial activity. Without
capital, entrepreneurs can never think to initiate his business. Availability of
capital helps an entrepreneur to arrange the basic means of business i.e. land,
machinery, material, manpower, etc.. Without adequate capital no one can
combine all the means of production. Supply of adequate capital also assists in
generating or increasing capital and profits. Supply of adequate capital is
regarded as lubricant to drive the engine of entrepreneurship growth.
Research suggests that as the supply of capital increases, entrepreneurship
also increases and this has been already experienced in the entrepreneurial
societies like USA, China, Russia, and France. Researches further suggest that
one of the major reasons for entrepreneur’s failure is lack of sufficient capital
in many parts of the world.

2 Labour: The famous economist Adam smith has considered labour as an

important factor for economic development. Availability of quality labour in
right quantity always considers one of the major factors of economic as well
as entrepreneurship development. Cheap labour is another requisite of
entrepreneurship growth as it directly affects the emergence of
entrepreneurship. Availability of low-cost labour is a boost for entrepreneurs
as it directly linked with the smooth functioning andprofitsofan
enterprise. Labourproblemsaffectthehighlabour intensiveenterprises but
entrepreneurs can manage the impacts of this problem by bringing labour–
saving innovations or through technology like Japan and USA did to solve the
problems of their industries. Labour issue can be better managed
than capital issue.

3 Raw Material: Another factor under economic factors that affect the
growth of entrepreneurship is necessity of quality raw material in economic
cost. To establish an enterprise in any region, availability of raw material
is major determinant. In the absence of raw material, neither
entrepreneurship developed not entrepreneur emerged. For example an
entrepreneur wants to start a furniture house, he arranged capital through
private investment and borrowings from family, also arranges skilled labour,
but, if there is no timber available in nearby markets, all efforts will go in vain.
Entrepreneurs must understand the relevance of availability of raw material
as it directly affects the cost of production. Raw materials supply does not
totally hamper the growth of entrepreneurship as entrepreneurs can manage
the problems of supply of raw material through innovative supply chain
system and application of effective technology. If supply of raw materials is
regular in the market, then there is no need to put extra efforts for the growth
of enterprise.

4 Market: It is the market that provides the potential reward to the

entrepreneurs. Market consists of producers and buyers or a place
where seller sells his/her produces to
customers. Market is major determinant for the success of any
entrepreneurial initiatives and without market no one can survive in the
world of entrepreneurship. Entrepreneurs can generate capital,
arrange labour, procure raw materials but he cannot create market, he can
only generate demand for his produces. Consumption of final products rests
with the demand of the customers. Market size and composition of market
influence the behaviour of entrepreneurs. Nature, size, and composition
of market especially dominance of a product in a given market more
influential for the growth of entrepreneurship. Distance of market from
enterprises also affects the functioning of enterprise but entrepreneur
through effective transportation can manage the challenges thrown by
distance issue. There are many examples where we can see that rapid
development of market significantly increase the appearance of
entrepreneurs like the German and Japan economy.

Social Factors

Social scientists support that economic factors alone are not sufficient to
boost entrepreneurship in any region. An entrepreneur can never be
successful where society fails. Advocates of social theory state that influence
of economic factors on entrepreneurship growth depends on social factors
also. Some of the social factors that affect entrepreneurship growth are
discussed here under:

1.Entrepreneurship Legitimacy: For entrepreneurship establishment and

growth, system of norms and values within a social setting are major social
determinants. The system of social norms and values is known as legitimacy of
entrepreneurship. Approval and rejection of society in terms of norms and
value influences the entrepreneur’s behaviour. Schumpeter; famous
economist, describes these social norms and values as an appropriate social
climate for entrepreneurship development. Various academicians
propounded that to be a successful entrepreneurs, social support is must. The
social status of entrepreneurs considers the most important among the
entrepreneurship legitimacy. For entrepreneurship growth, social norms and
values may be adapted or changed. Entrepreneurship legitimacy may affect or
disturb the appearance of entrepreneurship but not completely
eliminate. Environment where legitimacy is very low but government support
is very high, there entrepreneurship growth may be experienced.
 2.Social Mobility: Entrepreneurship growth also depends on social
mobility. Social mobility includes both social as well as geographical mobility.
Openness and flexibility in the social and cultural system affect the
entrepreneurship growth. Some academicians advocate that entrepreneurs
grow in flexible and liberal society where society adapts itself according to the
changing environment. There are many examples where it is proved that due
to movement of young and educated males from a region results
into growth of entrepreneurship after their return.

3.Social Marginality: Sometime entrepreneurship growth also depends on

social marginality. Social marginality means a group of society supports a
particular role for an individual due to differences from main social groups.
An economy sees growth of entrepreneurship where a particular social
system expects from an individual to assume entrepreneurial roles. This
marginality may be due to religious, cultural, and migration issues, etc. Social
marginality determined by entrepreneurship legitimacy and social mobility.
There as examples which explain that where entrepreneurial legitimacy is low
individuals are mobilized towards non-entrepreneurial roles and if legitimacy
is high, main stream individuals will assume entrepreneurial roles. There are
various factors that contribute for social marginality which ultimately results
in entrepreneurial growth. For example one is presence of positive attitude
toward a particular profession or business within the social group and
another is a very high degree of unity or solidarity with in the social group.

4.Security: Entrepreneurs’ social and economic security also affects

entrepreneurship growth. Entrepreneurs’ emerged in that society which
provides security to him/her. Many scholars advocate that entrepreneurs’
security is an important facilitator of entrepreneurship growth. It is not
decisive that what is the appropriate level or amount of security which results
in entrepreneurial emergence. Few said a little bit security is enough
while other advocate moderate security. Few other propound that
entrepreneurs emerged in turbulent conditions because sometimes it
positively contributes. But, security is regarded significant factor for
entrepreneurial growth. This is also justifiable as entrepreneurs’ afraid from
losing their assets and they expect an amount of security for their survival and
where they get, entrepreneurship emerged in that society.
 Psychological Factors

Along with economic and social factors psychological factors also

contribute in the growth of entrepreneurship. If an economy
provides best economic environment and society also supports
entrepreneurial endeavour but, if individuals are not self motivated then all
economic and social support will be wasted. There are various psychological
theories of entrepreneurship which propounded that for entrepreneurship
development positive attitude and motivation is crucial. Following are the
psychological factors that affect entrepreneurial growth:

1.Motivation for high achievement: According to D. McClelland’s theory of

need achievement, primarily, motivation for high achievement is the major
psychological determinant for entrepreneurship development. This theory
advocates that entrepreneurship emerged in a society that reflects need for
achievement. Society that has high need achievement would expect high
growth in entrepreneurship. McClelland further states that due to need for
high achievement one succeeds and other fails in entrepreneurship due to low
motivation. Further, it is suggested that need or motivation for high
achievement can be developed through trainings.

2.Status Respect: Status respect is another psychological factor that affects

entrepreneurship growth. Academicians stated that withdrawal of expected
status respect forces group of society or individuals to opt for something
different or unique to get the status respect and most of the times to express,
dissatisfied individualsopts for entrepreneurship. Hagen (1962) supports this
fact through the example of Japan’s development. He stated that
Japan experience high growth in entrepreneurship due to withdrawal of
status respect from colonial rule and Samurai group which force Japan’s
society for increased innovation and creativity. Withdrawal of status respect
may be due to:
i. Social groups displaced from their origin.
ii. Values of social groups may be disrespected.
iii. Status respect inconsistency.
iv. Migration into new society.

Withdrawal of social respect gives rise to following situations:

 i. To get an identity, individuals work hard and remain different through
his business.
ii. To survive in such society, adopt a new way of adaptive life.
iii. Try to be innovative and creative as an entrepreneur work to establish a
new society.

7. Government/Political Approach

All above discussed economic, social and psychological factors directly or

indirectly influenced by the actions of government. To achieve the
developmental objectives, government through its various policy initiatives
tries to provide congenial environment to entrepreneurs. These policy
measures may be in the form of economic policies, social schemes, and various
training programmes. Government can facilitate the establishment and
growth of entrepreneurship by creating basic facilities and services to the
entrepreneurship. Entrepreneurial growth is affected by various government
actions such as development of special economic zones, industrial areas,
industrial estates, and favourable policy initiatives. In India, government is
trying to provide favourable entrepreneurial environment by enacting
MSMED Act 2006, establishing separate ministry for MSME sector and by
launching various attractive schemes for entrepreneurs. If government is not
active or least interested in the economic development of society, no growth
in entrepreneurship will be there. Other factors are also influenced by the
government actions and approaches towards entrepreneurship development.

Technological Factors

 Access to technology – Advanced technology improves efficiency and

competitiveness.
 Digitalization – The internet, e-commerce, and online marketing create
new business opportunities.
 Research and development (R&D) – Innovation in products and
services leads to business growth.

Other Factors

Besides economic, social, psychological, and government/political factors,

there are many other factors that affect the emergence and development of
entrepreneurship. Few of them are discussed below:
 1 Infrastructural Development: Ultimate goal of development is to
provide the benefits to the last citizen of the country. Most of the times,
economic factors are favourable for entrepreneurship, society also adapts the
environment, and government policies are also attractive
but poor infrastructure for the business negatively influences the psychology
of the entrepreneur. Sound infrastructural development may nullify the
problems of location in many cases. Infrastructural facilities
create positive way for small enterprises growth whether that is artisans or
agri-entrepreneurs. Infrastructural programme coordinated with other
element may gear up the growth of entrepreneurship. For example; there is a
small horticulturist in a hilly town and totally focusing on the development of
horticulture produces but there is no cold store or warehouse to stock the
produces, in such case, slowly few small entrepreneurs may leave their
business which is their choice. But, in this case, if proper warehouse or cold
store is developed, this will boost the growth of such kind of enterprises.

2 Environmental Scanning: Another factor that affects the development of

entrepreneurship is integrated approach of environmental analysis. Key
to growth of entrepreneurship is effective analysis or careful research of
surrounding environment. Environmental scanning gives the idea of
enterprise’s strengths & weaknesses and opportunities and threats posed
by environment. It gives theclearideaaboutthetargetandbeneficiary
customers, their activities, needs, and shopping habits. Most of the times,
entrepreneurs fail due to poor analysis of environment which results in slow
growth of entrepreneurship.

3 Training: For the proper and speedier growth of entrepreneurship,

entrepreneurs should have the necessary and adequate knowledge and skills
to run the enterprise. Most of the entrepreneurship initiatives fail due to poor
knowledge and ineffective implementation of idea. Other reason for failure or
slow growth rate of entrepreneurship establishment is lack of skills. All these
components are not permanent and out of control, these can be solved
through proper education and training. Training significantly
contributes in the establishment and development of entrepreneurship as it
imparts necessary knowledge and skills to entrepreneurs for the smooth
operations of the business. Proper training institutes and training
programmes boost entrepreneurs to initiate entrepreneurial activity and
positively influence their psychology. Moreover, training also helps in
creating high need for achievement. Training further motivates entrepreneurs
to take initiative and also helps in acquiring necessary competencies to
achieve success in business.

Summary

Growth of entrepreneurship not only rests with entrepreneurs’ action and

government approach. There are various other factors that also affect the
emergence and growth of entrepreneurship along with entrepreneurs’
psychology and government actions. Entrepreneurship in any country does
not emerge by chance or automatically. Presence of many factors in an
economy called conducive factors helps in entrepreneurship growth. These
factors are economic, social, psychological, government and many others. All
the above discussed factors are interlocked and mutually dependent on each
other. No single factor can facilitate the establishment and growth of
entrepreneurship. Economic factors include; availability of adequate
capital, frequent supply of raw materials, quality labour in right quantity, and
developed market. Social factors cover legitimacy of entrepreneurship, social
mobility, marginality, and security. Psychological factors include motivation
for achievement and status respect. For the smooth establishment and high
growth of entrepreneurship, government approach is very crucial.
Entrepreneurship flourishes only in that society where government takes
proactive steps for the development of entrepreneurship. Entrepreneurship
never grows in that environment where government is not interested in the
development of entrepreneurship. Among other factors government policies,
rules and regulations, infrastructure, and environment analysis are the
important ones those affect the growth of entrepreneurship. In conclusion, we
can say that entrepreneurship includes various economic and non-economic
factors. It can only grow where conditions are conducive in terms of
economic, social, personal, psychological and political, and when all are free
from constraints.