Explain how political environmental influence entrepreneurship?

Question

identify and explain the factors that influence entrepreneurship

Answer 1

Entrepreneurship is tricky, because it can be defined in so many different ways.  Is every small business owner an entrepreneur, or do entrepreneurs bring more creativity and innovation to a field, even if they are employed by large companies?  That is, is entrepreneurship something you "do" or something that you "are"?

Anyway, technical definitions aside, probably the biggest single political factor influencing entrepreneurship is property rights.  That is, what is the point of opening a successful business or innovating a product if the government, mobsters, or competitors can just steal your ideas from you?  If you know that as soon as you come up with something, that you will be killed so that someone else can profit from it, that is a pretty heavy negative influence.

Another factor could be taxation.  Political regimes are always promising to do something to taxes and so if you believe the next regime may increase taxes on your area of business, you may be less inclined to take risks in that area that would be considered "entrepreneurship" and could turn a profit for you.

Hopefully thinking about these factors may push you on to consider other less obvious ways that entrepreneurs could be influenced by the political environment.  Good luck!