The Drivers and Inhibitors of Entrepreneurial Growth

Most important role is played by the market and effective marketing is key to the growth of entrepreneurship

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Entrepreneurs are the drivers of innovation and every day their determination touches billions of lives and creates employment opportunities needed for economic growth.

They’re focused on a material, economic problem. Their platform is pre-emptive, proprietary, pivotal and scalable. They carefully craft a brand, culture and a talent-management approach which supports the mission. They focus on a rigorously defined set of value-creating metrics to guide which have direct and immediate influence on entrepreneurship.


Capital is a key factor for the establishment of an enterprise. Increase in capital investment is directly proportional to increase in profits helping in the process of capital formation.


The most important role is played by the market and marketing is key to the growth of entrepreneurship. No entrepreneur can survive without a thorough and updated knowledge about market and techniques.

Raw Materials

It is basic necessity for establishing any industrial activity and it helps in the emergence of entrepreneurship.


Easy availability of right type of workers also effect entrepreneurship. The availability of labour determines the growth of entrepreneurship.


Expansion of entrepreneurship presupposes properly developed communication and transportation facilities. It not only helps to enlarge the market, but expand the horizons of business too.

Social Factors

Factors such as family background, education, social environment and even caste system, as in India, also play important roles.

Psychological Factors

A very interesting study on psychological theories of entrepreneurship was put forward by David McClelland. He said ‘need achievement’ is social motive to excel a typical characteristic of successful entrepreneurs. Other factors included loss of social respect/status and motives.

Institutional Context

Entrepreneurial opportunities also depend on the institutional context. For instance, researchers have documented that changes in policy regime and changes in the law can have a dramatic impact on entrepreneurial opportunities. Entrepreneurial education and training is again directly proportional to growth and business creation. Surveys suggest that almost 20% of students, who participate in a mini-company programme in secondary school, later tend to start their own company, a figure that is about three to five times that for the general population.

Obstacles Inhibiting Entrepreneurship Development

Insufficient infrastructure and high cost of production is one of the prime obstacles to growth of entrepreneurship, there is also a high degree of risk involved in new enterprise. In several social and cultural, there is a perceived low status of businessmen in the eyes of public in certain societies and also effects of customs and tradition. Arbitrary administrative laws leading to uncertainties among entrepreneurs also affect the proper growth of entrepreneurship.

Economic Factors

Profitable innovations require basic facilities like transportation, communication power, supply etc. They reduce cost of production and increase profit. Non-availability of capital- inventions are capital oriented. In less developed countries most capital equipment have to be imported which involves foreign exchange which acts as a difficult problem. Risk is high in case of less developed countries as there is lack of reliable information, markets for goods and services is small etc. Non availability of labour and skills

Psychological Factors (Once More)

Issues like security, conformity and compliance, need for affiliation etc also restrict promotion of entrepreneurship.

Economic Policies

Strategies which do not promote free enterprise or do not provide entrepreneurial incentives, lead to inhibition of entrepreneurship.

Arijit Dutta

Written By

Arijit Dutta is the Managing Director of Priya Entertainments Pvt Ltd (PEPL), owner of the iconic PRIYA Cinema and Bioscope brands. PEPL has diversified into eco tourism, and has set up eastern India's most modern eco adventure tourism hub, at Khairabera in Purulia. Dutta also spearheads Eastern Fashion Legacy and is the co owner of Jalpaiguri Royals, a celebrity cricket team.