for diploma level

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LECTURE 2
The Importance Of
Entrepreneurship And Factors
Affecting Entrepreneurship

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Objectives
The objectives of this chapter are to:
 provide better understanding of the importance of
entrepreneurship in a free market economy.
 describe important factors that affect individual
inclination and interest towards entrepreneurship.

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Learning Outcomes
At the end of this chapter, students should be able to:
 gain an understanding of the importance of entrepreneurship
in a free market economic setting so that they will be able to
think critically whenever entrepreneurial development is
discussed
 learn some background factors that affect a person’s
inclination and interest towards entrepreneurship

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Why do we need to
study
entrepreneurship?
How
entrepreneurship
does affect us?

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Entrepreneurship teach us to…
 Creates opportunity
 Ensures social justice
 Instills confidence
 Stimulates the economy
 Take risks
 Fail and to continue
 Become creative, resourceful and innovative

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What is the importance of
entrepreneurship?

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The Importance of Entrepreneurship
 One of the main functions of entrepreneurial
initiatives and activities are:
– to provide products and services to the society
(customers) that will add value and enhance the
quality of their life.
– create great impact on society in terms of
products, employment opportunities and other
economic multiplier effects to the local and
national economy.
– bound to be more productive, competitive and
prosperous
– to produce output that are of higher quality,
cheaper and better service delivery to serve
customer’s needs.

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The
Design
Story of
Proton
X70

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 Promote research and development -
Entrepreneurship is innovation and hence
the innovated ideas of goods and services
have to be tested by experimentation.
 These are enablers that provide
opportunities for individuals and
organization to progress and move up the
social and economic ladder in society.
 The whole process helps to create wealth
and prosperity to a nation.
The Importance of
Entrepreneurship (cont.)

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What are the
factors affecting
entrepreneurial
activity?

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Personal factor
• Aspiration
and attitude

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Environmental
factor
• Political
• Socio-cultural
• Economic
• Legal

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Other factors
• Entrepreneurial
education
• Increasing
demand for
variety

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 Legal Factors
– regulatory framework
– flexibility and adaptability of the law and other legal
rules governing the business activities in a country.
Factors Affecting Entrepreneurship

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