Hello lavania:
Please review the following answer. Important links are provided which
will help explain the answers. Let me know if you need further
explanation. THANKS.
WHAT IS ENTREPRENUERSHIP?
The definition of Entrepreneurship is as diverse as the different
functions of the Entrepreneur. A largely held view of the term is that
an Entrepreneur is the person who brings about a change and possesses
characteristics to implement ideas to benefit the society as a whole.
Only a few people are talented enough to manage this change. Apart
from this definition, a simple explanation of the term
?Entrepreneurship? is that it is the person who wants to work for
himself.
The Austrian economist Schumpeter defines Entrepreneurship as an event
that introduces a new product, a new product method, new markets or a
new form of organization. According to Schumpeter, in a perfect
scenario, these actions will help generate wealth by creating a demand
in the market from a newly introduced innovation. Thus, a true
Entrepreneur is one who combines the input factors in such a manner
that will generate a greater output. This greater output from the
various input factors will result in creating wealth for the society.
ENTREPRENEURSHIP AND SOCIETY
Entrepreneurship helps the society as well as the entrepreneur,
itself. The benefits of an entrepreneurship may be divided into three
distinct categories that include the benefits to the nation, benefit
to the society and the benefit to the individual.
As already discussed, an effective entrepreneurship venture fosters
the production of wealth for a nation. When many of the
entrepreneurship produce an output greater than the input, the economy
of the nation is directly bolstered. Another advantage to the nation
is the creation of jobs for its people. Such a job creation utilizes
the human resources of that particular country and helps the natural
talent materialize. With the new inventions and development in the new
technology a nation can use its resources more effectively. Since, a
majority of the entrepreneurship projects are private; it provides an
environment of competitiveness which further increases the quality of
the products in the national markets. By privatizing the local
economy, entrepreneurship ventures help attract eager foreign firms
who are otherwise reluctant to do business with the government
subsidized economy.
The income level of the average person and the standard of living of a
society increase with every successful entrepreneurship project that
is undertaken. There is an increase in the employment level on the
regional scale. It is also noticeable that an entrepreneurship helps
develop other entrepreneur businesses because of the extra incentives
that it can provide to a new entrepreneur in the shape of capital,
knowledge and technology. Entrepreneurship helps the societies to
fulfill its basic needs in the world that calls for the ?survival of
the fittest?. Entrepreneurs lead by example in assisting the society
and therefore boost the moral of the public.
An entrepreneur helps himself while creating opportunities for others.
It is a fact that by doing so an entrepreneur fulfills his creative
urge. Each successful project carried out by the entrepreneur leads to
self satisfaction. The greatest satisfaction is derived from the fact
that the individual is his own boss and therefore can use its
creativity without any fear of repercussion. The quality of every good
entrepreneur project is the profit and the fame that such a career
provides. Infect, entrepreneurs always enjoy respect and high status
in their communities.
FUNCTIONS AND FEATURES OF ENTREPRENUERSHIP
Ever since the French economist Richard Cantillon tired to define the
entrepreneurship, there has been a debate on the exact role and
functions of an entrepreneur. Apart from the differences in defining
the term, all of the economist from Adam Smith, David Ricardo to the
modern economist like Mill and Marshall agree that entrepreneurship
plays an important role in developing the economy by generating
wealth.
Early economist agreed that among the four factors of production,
(land, labor, capital and organization) organization is the factor
that is the coordinating factor that brings together the other three
factors and the entrepreneurship is the element that powers and
strengthens the organization. These economists approved that the
entrepreneur has a vast understanding of the workings of the industry
in which he determines to undertake the venture. Also, the
entrepreneurship is a skill that not everyone possesses. The ability
to be an entrepreneur is inherited and is displayed by a minority in a
population.
A few modern economists believe that entrepreneurship is itself the
fourth factor of production that is the most important in driving a
successful economy. These experts are of the view that entrepreneur
are defined by their risk taking abilities and their intentions to
fill in the void because of the existing lack of knowledge about a
product. According to them the entrepreneur ventures are carried out
where there is a gap in the development of a product. The
entrepreneurs work to fill the gap by introducing something that
increases the effectiveness of the already existing product.
Still, many recent theories of entrepreneurship stress that it is not
only the inherent and risk taking abilities of a person that can
define an entrepreneur but also the ability to predict where the
opportunity for growth exist. By grasping these favorable
opportunities, an entrepreneur works to create a new product by using
innovation. The new entrepreneurs are able to track the deficiencies
in the demand and supply of the market and provide a new improved
product, for which there will be a demand. It is true that a great
amount of entrepreneurship projects in the developing countries can be
attributed to inventing a new product, very few of the entrepreneurs
can innovate a new product in less developed countries due to limited
resources. Therefore, in the third world countries the definition of
the entrepreneur can be modified to include those people who try to
improve on the existing technology which is already present in the
developing countries.
ENTREPRENUERSHIP AND BUSINESS ENVIRONMENT
The state of the society and the government are interdependent on the
many entrepreneur projects being undertaken around the world. The role
of each entrepreneurship projects differs widely on a global scale due
to the disparities in the local business environment. In developing
countries, the process of privatization has helped to eliminate
restrictions on the kind of opportunities that exist in the market.
Whereas, socialist countries have historically helped entrepreneurs
who have shown keen interest in optimizing the plans of the
government. On the other side, less developed counties have rarely
provided the entrepreneur a thriving atmosphere.
The major hurdles that the new entrepreneurs face are the availability
of resources to carry out such a business. The most important is the
allocation of funds that comes in the form of money to research and
development. Another largely ignored factor is the availability of
knowledgeable partners who can run a successful entrepreneurship after
its initial stage. This is so because there is a great tendency for
the entrepreneur to move from one project to another. The lack of
knowledge on part of the management can halt the development process,
if adequate training is not provided. Historically, women owned
businesses have not been successful even in the developing countries
due to the lack of government support. It remains the most significant
problem in mainly the theoretical and male dominated societies.
Governments can help improvise the entrepreneurial spirit by not only
removing the hurdles described above but by creating an industrial
atmosphere that is favorable to the structural change. If the
resources are allocated from the losers to gainers by purchasing the
sales of assets, the entry and exist of the firms and rise and fall of
the industries, the governments can effectively allocate resources to
the successful entrepreneurs.
Experts agree that the most effective method of managing the
entrepreneurship industry is to foster the start-ups. Among other
techniques, this can be achieved by minimizing the paper work and
formalities for the new starter. A single identification number should
be issued to every new entrepreneurial project to track down each
case. The authorization process should not take long and the case
decisions should be made by a fixed date. Tax treatment of the new
subsidiaries and the policies on induction of new employees should be
simplified.
TYPES OF ENTREPRENUERSHIP
According to Schumpeter, there are five basic types of
entrepreneurship projects. The introduction of a new good in the
market is the first of these. By new product, it means something that
has been invented and has never been available in the market. In
simple terms, whenever a new invention is made, it is seen as an act
of entrepreneurship. The second is the introduction of the new method
of production. As we know that it is production of goods that forms
the pillar of the economy. By new method, it is assumed that the
method that is effective and efficient and is able to improve on an
existing production method. The third type of entrepreneurship is the
opening of a new market. Whenever, such resources are provided that
enables the population to benefit, whether it is an economic,
education or any other benefit, it establishes a new opportunity that
is known as a new market for using that particular resource. The
fourth factor is the conquest of a new source of supply. Economist
believes that a new supply source allows the industry to increase its
productivity. This new source can be in many forms including the
discovery of a natural resource (oil, steel etc) or attracting a labor
force that hasn?t been exposed to that industry. The last but not
least is the carrying out the new organization of industry that will
increase human welfare.
Although, all of the five types of entrepreneurship are important but
according to Schumpeter, the most influential is the introduction of
the new product in the market (invention) that will directly increase
the human welfare. The remaining four factors indirectly affect the
human welfare by reducing the cost. Therefore, in order for the
remaining four factors to contribute, it is important that the first
factor be present and it can only be done with the invention of a new
product.
RURAL ENTREPRENUERSHIP
These days rural entrepreneurship is seen as the largest force in the
development of the rural areas. Infect, many of the developing
countries in the world have use the concept of rural entrepreneurship
as a very successful method of deterring rural unrest. The greatest
asset that the rural areas have in not the natural resource but it is
the vast uncultivated land. Due to the ever growing population of the
world and the expansion of the metropolitan areas, government?s
reliance on the rural land has significantly increased. These lands
are used in the development of industry and establishing manufacturing
base. Many countries have used these lands to establish recreational
and educational facilities. This is one of the primary reasons that
most new institutions of higher education are opening in suburbs and
small towns.
Another great advantage in the rural entrepreneurial projects is the
availability of cheap labor that can reduce the cost of production. It
is also well known that the less technical projects have a chance of
success in rural communities because of the closely knit together
communities that can carry out the communication much better than the
workforce in the cities. The production plants of many large
entrepreneur projects are always located in these rural communities
because not only does these projects provide employment opportunities
but also prosper on behalf of the hard working labor force.
Governments and companies are promoting rural entrepreneurship by
providing extra incentives to women who have been allocated to the
traditional feminine jobs. Many companies have established training
centers in order to educate the rural workforce on technical matters.
Historically, governments have eliminated many of the requirements for
the rural entrepreneurs who want to set up an industry in their
regional areas. Similarly, many of the entrepreneurs, who want to set
up rural industries, are exempt from strict laws that govern the urban
development.
PROBLEMS OF RURAL ENTREPRENUERSHIP
Rural entrepreneurship has its own drawbacks. Policies such as keeping
of land in protection when there is already an over production and
pricing subsidy policies that helps to retain the minimum income are
two of the greatest threats to rural development. Due to the remote
access and unavailability of knowledgeable labor, it is difficult to
advise the local entrepreneurs who are willing to take risk. Access to
capital labor, commercial markets and the managerial staff are
hindered due to the remote locations.
In order to alleviate the problems of rural agriculture, a competitive
agriculture entrepreneurship under the government supported resources
in needed. The government should set aside a quota for the rural
entrepreneurship projects and select only the very best ideas that
directly benefits not only the community but can compete on a global
scale. It is also vital for the success of the rural communities that
the development of each rural project remains in the hand of the local
agencies which in return cooperate with the government to oversee the
entire project. Entrepreneurship education is the leading factor that
can help develop the rural areas. Governments should encourage the
foundation of a local network that can communicate with the rural
population and try to abridge the gap between the extended and remote
communities.
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IMPORTANT LINKS
_________________
(1) Entrepreneurship Defined
http://www.quickmba.com/entre/definition/
http://www.thinkinglike.com/Essays/entrepreneur-definition.html
(2)Entrepreneurship and Society
http://www.karunya.edu/cic/entre/benefits.html
http://www.zetterberg.org/Lectures/l781003.htm
(3)Features of Entrepreneurship
http://www.technopreneurial.com/articles/heffalump.asp
http://www.st-andrews.ac.uk/institutes/crieff/papers/crieff0024.pdf
http://www.ehv.vxu.se/forskn/entreprofil/collective_phenomen.pdf
(4)Entrepreneurship and Business Environment
http://courses.nus.edu.sg/course/socsja/SC2202/Institutions/Flexible2b.html
http://www.oecd.org/document/5/0,2340,en_2649_34489_1903365_1_1_1_1,00.html
http://radio.weblogs.com/0111718/stories/2003/09/30/entrepreneurshipOrTheEnvironment.html
http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/start-ups/rec_start-ups.htm
http://www.fingaz.co.zw/fingaz/2003/November/November13/4140.shtml
http://www.babson.edu/entrep/fer/front_89.html
(5)Rural Entrepreneurship
http://www.fao.org/DOCREP/W6882e/w6882e02.htm#P44_8010
http://www.fao.org/DOCREP/W6882e/w6882e02.htm#P44_8010
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SEARCH STRATAGY
_________________
Please use the terms listed in ?Important links? to find relevant articles.
>> The search was done in Google search engine.
I hope you will find it helpful. Please clarify, if you are not
satisfied. I will be obliged to help you further.
Sincerely,
Leader-ga. |
Clarification of Answer by
leader-ga
on
18 Mar 2004 11:38 PST
Hello Lavania-ga:
Here are some additional points. Please let me know if you need
further explanation. THANKS.
RURAL ENTREPRENUERSHIP
Rural entrepreneurship has an important role to play in the
development of US economy. Taking into account the fact that nearly 80
percent of the American population calls rural America it?s home,
adequate funding and support can provide a thriving entrepreneur
atmosphere in these communities. So far we know that rural America as
compared to the mainstream population is economically poor, older,
more isolated geographically, isolated from the main markets,
culturally imbedded in traditions, less dynamic economically and
experiencing depopulation.
It is to be noticed that most of the entrepreneur development policies
are tailored to meet the needs of the urban America. Such policies
will have to be changed by establishing such centers which exclusively
deal with the rural communities and provide consulting and research
facilities. These centers can than provide a network between the
isolated rural America and bridge the gap that hinders the
communications between these communities. Most of the businesses in
rural America are family owned thus providing a firm entrepreneurial
base which can be exploited by the establishment of the rural
entrepreneur centers. According to a recent study by the Rural Policy
Research Institute, there are already many entrepreneurs in the rural
areas who just need support to pacify their thirst for the welfare of
the public. These are the social entrepreneurs working in non-profit
enterprises such as social justice organizations, micro enterprises
and business associations.
The most overlooked aspect of the rural America, that can be
exploited, is the process of depopulation. Many of the young
enthusiastic people turn towards the cities in order to fulfill their
desire to become successful. Since, the rural America cannot provide
the growth opportunity for these young entrepreneurs to succeed, most
of them end up in finding ordinary and management jobs. Keeping in
mind the resources that a first world country has and the kind of
rural resources that countries like America boost, if the government
can provide an incentive for these young people to stay in their
communities and help them in setting up entrepreneur projects from
their own family owned businesses, such a program can bring about an
unmatched success in rural communities.
PROBLEMS OF RURAL ENTREPRENUERSHIP
A drive to develop Rural Entrepreneurship will always face stiff
resistance from some of the key factors. One of the major drawbacks of
the success of a rural entrepreneur is that very few of the
entrepreneurs have a good objective view of the financial conditions
of their businesses. It is a well known fact that unlike other
projects, entrepreneurship requires capital in hand. A successful
entrepreneurship requires a good estimate of the depletion of the
capital stage by stage. Also, known is the fact that most businesses
fail in their first two years. Awareness on the financial aspects will
be important and the rural entrepreneur centers will have a major role
to play in structuring the capital management of any proposed venture.
Managerial experience is the second most important factor that will
affect the operations of middle and large projects. The government
will have to implement strategies that will either motivate the people
with enough managerial experience to work in the rural projects or it
will have to allocate further resources to train the existing
population. Another major factor is the use of information technology.
There is a need to train the local population in the use of computers
and other technical process that retrieves information through
technology. Without proper computer training, the effectiveness of the
rural entrepreneurship projects will always remain in doubt.
Most entrepreneurship projects cannot succeed without the direct
support of the agricultural organizations, local workers and field
staff, who will see new projects as an attrition of resources that are
devoted to their clients. The government will have to convince these
local administrations that the new entrepreneurial spirit will only
help their businesses as well as the local community.
HELPFUL LINKS
http://216.239.51.104/search?q=cache:7R1XzY_BPtsJ:www.nga.org/cda/files/MACKE1.pdf+rural+entrepreneurship&hl=en&ie=UTF-8
http://www.joe.org/joe/1991fall/a6.html
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Clarification of Answer by
leader-ga
on
22 Mar 2004 16:13 PST
Hello lavania-ga:
Please let me know if you need further explanation. THANKS.
ENTREPRENUERSHIP DEFINED
Entrepreneurship has been very broadly defined by different
economists. According to the great modern researchers such as
Brockhaus, Gartner and Sexton, entrepreneurship includes the creation
of the organization. On the other hand, the popular economist
Schumpeter defined it as the exploration of activates.
The first definition of entrepreneurship, it is believed, was provided
by Richard Cantillon in the 1730?s. According to Cantillion,
Entrepreneurship is the self employment of any sort. In 1816 a new
definition emerged from the research of Jean Baptiste. The
entrepreneur was defined as,? who unites all means of production and
who finds in the value of the products...the reestablishment of the
entire capital he employs, and the value of the wages, the interest,
and rent which he pays, as well as profits belonging to himself."
In 1921, Frank Wright provided another explanation which states that
the entrepreneurs are people who can understand the dynamics and
workings of the economy and is able to manage such a change.
Schumpeter?s definition came around 1934 is still widely accepted. It
stated that an entrepreneur implements change by carrying out new
combination.
In the middle of nineteenth century, Penrose defined entrepreneur as
someone who can identify opportunities within the economic system.
Harvey Leibenstein defined entrepreneurship in 1968 and 1979 as
"activities necessary to create or carry on an enterprise where not
all markets are well established or clearly defined and/or in which
relevant parts of the production function are not completely known.?
Source: http://www.westaction.org/definitions/def_entrepreneurship_1.html
TYPES OF ENTREPRENUERSHIP
Experts have also tried to define entrepreneurship on the basis of
technology, geography and sociology. The first of these is the
technology driven entrepreneurship that brings a new product on the
market or an improved version of the older product. An example of such
type will be the deliverance of programs through satellite channels
where customers have the ability to choose between Programmes.
Technologies such as pay per view are an improved version of the older
TV programs.
Still, another type of technology is geographically oriented. In this
type of entrepreneurship the product is moved from one place to
another place where the new product hasn?t been introduced. This
entrepreneurship is far more common in third world countries. An
example of such entrepreneurship will be the use of wind power by
large wind turbines. A recent example will be of the US based GE wind
energy company that for the very first time installed large wind
turbines in India to produce electricity for the futuristically
designed small high-tech cities.
Sociological entrepreneurship uses a new concept of selling an old
product. The best examples of this type of entrepreneurship will be
the services of Midwest Airlines that is the first airline in US that
provides a higher standard of service in the sky by charging a little
more than the other airlines. Passengers in economy class get leather
seats, real food served in china (cookeries) and more leg space.
Midwest customers pay the extra price because they want that extra
luxury touch that is provided for a minimal overcharge.
Source: http://216.239.51.104/search?q=cache:6TBA0Nu2vzcJ:www.mcpa.org/programs/program_pdfs/ent_thurow.pdf+types+of+entrepreneurship&hl=en&ie=UTF-8
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