2. Psychological Approach: We have understood by now that the entrepreneur is not a common person. He has a typical personality with creative, managerial and imaginative skill who can innovate and contribute positively to an industrial project. This kind of personality develops in a person who has strong motivation for achievement. David McClelland, the greatest exponent of the psychological approach to entrepreneurship, is of the view that the genesis and performance of entrepreneurs requires strong motivation for achievement. The achievement motivation, according to McClelland, is a function of child rearing practices in a society. Unlike the sociological approach which asserts that the existing social structure determines entrepreneurship and economic development, the psychological approach seeks to find out how the social structure affects the attitude of the people of a society. Areas like entrepreneurial commitments, tendency of saving and investment and business management have been usually covered by the studies carried out bypsychologists.
Collins, Moore and others have examined a sub-category of business leaders. Their study of innovating entrepreneurs revealed that many of their subjects had experienced childhood poverty and disrupted family lives which stimulated strong motivations for personal achievements. John H. Kunkel questioned the validity of many psycho-dynamic concepts and principles and the unresolved controversy surrounding the role of social structure and personality in the process of economic development. He propounds the behavioural approach as an alternative. Joseph Schumpeter, the first to offer a systematic interpretation of entrepreneurship, had psychological perspective in his mind when he said that the entrepreneur possesses energy of will and mind to overcome fixed habits of thought and the capacity to withstand social opposition. 3. Political Approach: The political approach to entrepreneurship deals with the issues involved in relationships between entrepreneurship development and the state particularly in the context of the role of the latter in the development of entrepreneurs. The role of the government is crucial in deciding the nature and rate of development. Rapid growth of industries and good pace of economic development largely depend on the merit of economic policies of the government. Democratic and relatively stable governments are supposed to be conducive to economic development. Entrepreneurial supply would be greater in a state which believes in the ideology of capitalistic liberalism and provides requisite credit facility, appropriate training opportunity, technological and scientific knowledge and adequate incentive. The Government of India pursued the policy of mixed economy till the end of 80s of the 20th century which could not contribute to growth rate of 3 to 4 per cent for over 40 years of the economic regime of the country. Corruption, laziness, traditional power structure and weak governance, responsible for sluggish development, could not be removed by the state.