📘 Theory of Entrepreneurial Supply | 📅 1965 | 👤 Thomas Cochran/ John H Kunkel

The theory suggests that the level of entrepreneurship in an economy is not just determined by the individual traits of entrepreneurs (as in other theories), but is also heavily influenced by social, economic, and institutional factors that either facilitate or inhibit entrepreneurial activity.

🌐 1. External Factors are Key

Unlike some other theories that focus solely on the traits of individual entrepreneurs (such as risk-taking or innovation), Cochran’s theory emphasizes that external environmental factors are crucial in determining how many people will become entrepreneurs.

🏛️ 2. Focus on Systemic Factors

The theory suggests that to increase the supply of entrepreneurs, societies should create systems and environments that nurture and support entrepreneurial behavior.
This includes:

• Access to capital 💰

• Favorable laws and regulations ⚖️

• A culture that encourages risk-taking and innovation 🚀

🔄 3. Interaction between Individual and Environment

The theory recognizes that both:

• Individual attributes (e.g., entrepreneurial talent)

• External factors (e.g., economic conditions)

must align to encourage entrepreneurial activity.

It’s not just about having capable individuals; they also need the right environment to thrive.

🏗️ 4. Potential for Policy Intervention

Cochran’s theory implies that governments and institutions have a role in fostering entrepreneurship through:

• Policies that enhance access to resources

• Reduce barriers to entry

• Promote a positive attitude toward business creation