Identify and discuss how entrepreneurs can impact on the economy

Introduction

Definition of entrepreneurship

There are a lot of explanations and descriptions of entrepreneurship. Intellectuals and business experts, define entrepreneurship as only the uniting of thoughts, hard work, and modifications to the changing commerce market. It furthermore involves meeting market demands; mainly it portrays the key instructions of any trade innovation. Innovation is the key factor that administers the very formation of a small trade or entrepreneurship; it can be processes or it can be products.

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One instance of a process could be the formation of ideas in black and white, products can refer to everything that is produced that can be kept up for sale, whether it is a latest form of glue or even a service that offers; such as, housecleaning. On the other hand, innovations can as well be anything that brings in the discoveries of new products that transform the market or form a new market, a number of of these innovations might even restore existing innovations to become the favored process or product. When an individual wishes to become an entrepreneur they prefer to be an organizer, though, not everybody is suitable to be an entrepreneur – and not everybody has the essential skills to carry out successfully.

What Is An Entrepreneur?

A person who is capable of generating an innovative idea and fulfilling the demands of the public with an ability to organize people and resources is called an entrepreneur. Entrepreneurs are never discouraged even if their idea is rejected by anyone but they work hard to make their ideas successful. Entrepreneurs have to face various hardships and challenges as well.[1]

Entrepreneurship Aids the Economy

It is agreed by most of the economists that entrepreneurship adds vitality to the economy, either a developed or developing one. The reason why the economists support the existence of the entrepreneurs is that they not just create new businesses and make innovations using their creativity but they also create employment opportunities for people by employing them for their business. Mostly, it also increases competition due to which entrepreneurs opt for new things and also go for operational as well as technological advancements that further helps them to increase their productivity.

Each year around 75% new jobs are added in the economy of United States every year due to the eruption of new small businesses and this actually symbolizes 99% of all US employers. Small business are mostly self-employed by people. Entrepreneurs not just provide jobs to the people but they are also a source of security and generate social welfare as well. Schramm, president and CEO of Ewing Marion Kauffman Foundation, said in February 2007, “The foundation is devoted to fostering entrepreneurship”. Schramm is one of the globes’ foremost specialists in this field. Others have the same opinion that the benefits of small trades go further than income, Hector V. Baretto, manager of the U.S. Small Business Administration (SBA), makes clear, “Small businesses widen the base of contribution in society, generate jobs, disperse economic power and provide persons a stake in the future.”

Entrepreneurs innovate and innovation is a vital element in economic growth. As Peter Drucker said, “The entrepreneur mostly looks for change, reacts to it and utilizes it as an opportunity.” Entrepreneurs are accountable for the profitable introduction of several new products and services and also for opening fresh markets. A look at current history demonstrates that entrepreneurs were compulsory to many of the most important innovations, ones that transformed how persons live and work. From the vehicle to the airplane to computers – persons with ideas and strength of mind developed these marketable advances. Small companies as well are more probable than large firms to manufacture specialty products and services and tailor made items. As Schramm has recommended, entrepreneurs offer customers with services and products for needs they did not even realize they had.

Innovations enhance the quality by multiply customers’ choices, they augment people’s lives in abundant ways – making life simple, progressive communications, offering new varieties of entertainment and better health care. Small companies in the US, e.g., innovate far in excess of huge ones do, according to the Small Business Administration; small technology firms create almost thirteen times additional patents per worker than big firms. They signify one-third of all firms in control of fifteen or more patents.

According to the 2006 Summary Results of the Global Entrepreneurship Monitor (GEM) project, “In spite of of the point of development and company size, entrepreneurial performance remains a vital engine of innovation and expansion for the financial system, for individual firms as, by classification, it entails attention and readiness to take benefit of vacant opportunities.” The GEM plan is a multi-country study of entrepreneurship and fiscal growth. Founded and supported by Babson College (USA) and the London Business School in 1999, the study incorporated forty two nations by 2006.

Global and regional institutes, such as the United Nations and the Organization for Economic Cooperation and Development, have the same opinion that entrepreneurs can play a critical role in mobilizing income and encouraging fiscal growth and socio-economic progress. This is mainly true in the emerging world, where flourishing small businesses are most important engines of job formation and poverty diminution.

Role of entrepreneurship in conceptual economy

Although the basic rules of entrepreneurship being used today are the same as they were used previously but the medium has radically changed, however the change has been for better and is probably the best time compared to the history for an individual to become an entrepreneur. The entrepreneurs today are defining logic for the purpose of making things to happen on an individual basis. Previously, when the entrepreneurs used to set up business, they needed huge sums of investment before they could proceed or to arrange management teams for work and to make the company operate after which they took many years to make profits but now things have drastically changed. In order to make my statements more clear, I would be giving some examples.

A website titled “PlentyOfFish.com” is basically a free dating website and was founded by Markus Frind. The founder spends just two hours on the website each day and he manages his website but his earnings are $5-6 million per year from Google ads as around twelve million people view his page every year and the most interesting thing is that he is the only person operating his company. I would now quote another such example of Dave Lu, an entrepreneur who also earns in millions doing the same kind of work as Markus Frind. Dave is the founder of “Fanpop” where the fans of anything on Earth can share and interact with other people. One more thing that is synonymous between the two entrepreneurs is that they are operating their business using the least expensive tools that are instantly available to them. Connecting these entrepreneurs to the economy, I would say that conceptual economy enable the entrepreneurs to use both sides of their brain i.e. both left as well as the right side as they are not just focusing on technical skills but on their creativity and conceptualization as well and most of the entrepreneurs are working independently.

It is therefore essential for the entrepreneurs to lead in conceptual economy and go for new ventures. It was Microsoft that started Facebook that is now very successful social networking arena. Initially Facebook was popular just amongst the teenagers and the students of high school but now it is being used by people of every group. Not just it provides the opportunity of social networking but it is also beneficial for businessmen especially young entrepreneurs that can highly help boost the economy of any country.

Therefore, this economic model of conceptual economy has a great impact on every aspect of the society and in the later years, the entrepreneurs would be the ones who would be the true beneficiaries but the ones who take initiatives.

Recommendations and conclusion

In order to encourage the entrepreneurs to start their businesses and to promote them, the government should provide certain incentives to the entrepreneurs because entrepreneurs greatly help in boosting the economy and for this the government must also take some steps that would benefit the entrepreneurs and would eventually benefit the economy as well.

1. The government should not just promote entrepreneurship but it must also enhance entrepreneurial dynamic and it should be treated as something very vital for a government to boost economic growth.
2. The policies designed for the government especially for the entrepreneurs will have a more momentous as well as a direct impact on the programs designed to enhance businesses.
   It is essential for the government to coordinate these programs in an effective manner and support them in order to avoid any confusion and to help the entrepreneurs to focus more on utilization.
3. The entrepreneurial activity should be increased as in the end it would benefit the overall economy of the state as the participation level especially of individuals between 25-44 years of age.
4. Government should also encourage participation of women.
5. Commitment and investment especially in the monetary terms as well as educationally are essential for growth of any business. Governments should therefore promote education and people should at least earn the graduation degree.
6. It is also important to develop the capacity of an individual to recognize and pursue new opportunities other than just concentrating on making them gain knowledge and get education.
7. Higher levels of income disparity should be accommodated and in order to define a strong entrepreneurial culture.
8. A culture should be created and entrepreneurship should be promoted in the society by the key officials and the government.

References

1. Holden, Jeanne. (2008). Entrepreneurship Aids the Economy. June 29th, 2009. Retrieved from: <http://www.america.gov/st/econ-english/2008/May/20080603233010eaifas0.8230554.html>
2. Maharjan, Jay. (2009). Role of entrepreneurship in conceptual economy. June 29th, 2009.Retrieved from: <http://4entrepreneur.net/?p=119>
3. More business. (2008). What Is An EntrepreneurA Definition of Entrepreneurship. June 29th, 2009. Retrieved from: <http://www.morebusiness.com/business-entrepreneurship>

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