ECONOMIC FACTORS INFLUENCING THE ENTREPRENEURIAL ATTITUDES AND OPPORTUNITIES

 1. Economic policy

This defines the market systems established by the government, market structure and the extent to which all the firms compete under fair games rules. An open market system that leaves forces of demand and supply to control the distribution of resources allows entrepreneurship to flourish since it has more rewards for innovators. This allows opportunity identification arising from free entry into national and regional markets.

2. Administrative issues

These include the procedural requirements for registration, licensing, taxes and financial reporting which may either facilitate or hinder entrepreneurial activities.

Excessive number of rules and procedures discourage entrepreneurs from starting businesses, for instance, most small businesses consider paperwork as time consuming or cumbersome.

3. Infrastructure

The availability of infrastructure and utilities such as good roads, power, communication facilities and lack of corruption and bureaucratic delays in obtaining such utilities encourage entrepreneurial development.

However, Ugandan indicators for physical infrastructure are far below levels to provide business opportunities to local and foreign investors and those that are accessible are expensive compared to international standards.

4. Legal requirements

These should not be too stringent to inhibit entrepreneurship, but should be clear and effective enough to provide adequate protection to entrepreneurs against fraud.

An environment that institutes ownership rights and guarantees protectionism to local entrepreneurs provides opportunities for entrepreneurial growth.

5. Resource availability

Societies that are endowed with various resources provide start up opportunities and attract people to undertake business ventures as opposed to those without.

For instance loan availability, venture capital, management assistance, technological assistance, land, natural resources, raw materials, semi-finished goods, waste products and by products.

6. Cost of business

Countries with flexible low cost space, air transportation, overhead costs, inflation, interest rates, tax structure, insurance cost highly influence the level of entrepreneurial development. Entrepreneurs (investors) seek opportunities for investment in countries where costs of business operations are low.

7. Economic incentives

These are economic privileges given to investors. In countries where people are given economic support in terms of tax holidays, industrial parks, e.t.c, entrepreneur intentions are higher. For instance, in Uganda, the government’s investment policy stipulates that whoever in upcountry regions is to be given 100% tax holiday for 5 years and machinery and equipment are imported free of tax.

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