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Temporal context: This concerns the effects of time and history on entrepreneurial behavior and innovation.This dimension highlights the role of geography on entrepreneurial behavior and innovation
The second component of the geographic context is the localization or concentration of favorable regulations, laws and networks that support and encourage entrepreneurship and innovation.Informal rules tend to operate through established social norms and perceptions of legitimacy and social desirability which include the norms and attitudes of a society, influence opportunity recognition of (potential) entrepreneurs as well as opportunity exploitation and access to resources.As an enterprise evolves from start-up, establishment and growth, existing sources of financing may no longer be accessible and the entrepreneur may need a new source of venture financing.The first is the location of an enterprise in communities, neighborhoods, regions (Example; rural vs. urban), nations or global reach.Geography has two components.
Temporal context: This concerns the effects of time and history on entrepreneurial behavior and innovation. To understand the role of temporal context, look for changes that have occurred in an enterprise over time, the reasons for the changes and the associated effects on the enterprise.
For example, consider the stages of an enterprise life-cycle described. As an enterprise evolves from start-up, establishment and growth, existing sources of financing may no longer be accessible and the entrepreneur may need a new source of venture financing. There may also be changes in ownership and governance of the enterprise, which can affect the way decisions are made in the enterprise.
Changing regulations and market conditions require entrepreneurs to adapt what they do to be able to succeed. It is important to recognize that not all entrepreneurs wait for changes to occur before taking actions.
For example, the development of digital platforms by some entrepreneurs causes other small enterprises to consider using such platforms to manage different parts of their operations. Spatial or geographic context: This dimension highlights the role of geography on entrepreneurial behavior and innovation. Geography has two components.
The first is the location of an enterprise in communities, neighborhoods, regions (Example; rural vs. urban), nations or global reach. Individuals have to make choices about where to set up a new enterprise and this depends on the attractiveness of the location (Example; the presence of key stakeholders such as customers, partners and suppliers) and access to resources (Example; financing and government support).
Some countries are well placed geographically and thus, benefit from the advantages that come from their location. Other countries are located in less attractive regions which deprive them of key resources, factors of production or international markets.
This dimension highlights the role of geography on entrepreneurial behavior and innovation
The second component of the geographic context is the localization or concentration of favorable regulations, laws and networks that support and encourage entrepreneurship and innovation.
For example, the European Union supports cross-cultural learning, trade, outsourcing and collaborative ventures among entrepreneurs across member countries.
Institutional context: The formal and informal political, economic, legal and socio- cultural rules that govern the conduct of people in a society.
Formal rules are political and economy-related rules which create or restrict opportunities for entrepreneurship and innovation.
A formal institution can be an organization, such as government ministries, regulatory bodies and local government offices that develop and/or implement policies.
Formal institutions can also take the form of laws and regulations for market entry and exit, intellectual property rights, employment, competition, rules encouraging/restricting access to government support.
Informal rules tend to operate through established social norms and perceptions of legitimacy and social desirability which include the norms and attitudes of a society, influence opportunity recognition of (potential) entrepreneurs as well as opportunity exploitation and access to resources.
For example, although some countries have equal laws for both men and women, research suggests that men tend to have more preferences than women due to societal perceptions of women as housewives.
Entrepreneurs need to be aware of these different components of an institution to be able to make decisions that enhance their chances of success
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