The relationship between entrepreneurship, corporations, and economic

development is complex. By applying this model to a nation’s economy,

important conclusions can be drawn. A nation’s economic development depends
on successful entrepreneurship combined with the force of established
corporations. However, the beneficial value of this mechanism varies
with the national income, as measured by GDP per capita. At low levels of
national income, self-employment provides job opportunities and scope for the
creation of markets. As GDP per capita income increases, the emergence of new
technologies and economies of scale allows larger and established firms to
satisfy the increasing demand of growing markets and to increase their relative
role in the economy. At the same time, the numbers of business start-ups
decrease as a growing number of people find stable employment. Finally, as
further increases in income are experienced, the role played by the
entrepreneurial sector increases again, as more individuals have the resources to
go into business for themselves in a business environment that allows the
exploitation of opportunities. In high-income economies, through lower costs
and accelerated technology development, entrepreneurial firms enjoy a newly
found competitive advantage. Thus, entrepreneurs in countries with different
levels of GDP per capita face different challenges. As a result, policies and
conditions favorable to entrepreneurship in one country (or region) may
not be effective or favorable in another.

What is the importance of entrepreneurship to the economy?

The importance of entrepreneurship to any economy is like that of
entrepreneurship in any community. Entrepreneurial activity and the resultant
financial gain are always of benefit to a country. If you have entrepreneurial
skills then you will recognise a genuine opportunity when you come across one.
We Simplify the Internet has franchise opportunities available globally for the
all-inclusive fee of $49,700. The company, who has been awarded the accolade
of being rated the Number 1 Internet Consultancy business for six consecutive
years, has franchisees operating in 87 countries worldwide. Because a We
Simplify the Internet consulting business can be run from home, newcomers cite
this as an advantage they also appreciate the full support and training offered
them by the corporation.

The importance of entrepreneurship and innovation to any economy is like that

of entrepreneurship in any community. Entrepreneurial activity and the resultant
financial gain are always of benefit to a country. If you have entrepreneurial
skills then you will recognise a genuine opportunity when you come across one.
We Simplify the Internet has franchise opportunities available globally for the
all-inclusive fee of $49,700. The company, who has been awarded the accolade
of being rated the Number 1 Internet Consultancy business for six consecutive
years, has franchisees operating in 87 countries worldwide. Because a We
Simplify the Internet consulting business can be run from home, newcomers cite
this as an advantage they also appreciate the full support and training offered
them by the corporation.

Entrepreneurship Aids the Economy

Most economists agree that entrepreneurship is essential to any economy

(The following one-page essay is taken from the U.S. Department of State
publication, Principles of Entrepreneurship.)
Entrepreneurship Aids the Economy

Most economists agree that entrepreneurship is essential to the vitality of any

economy, developed or developing.

Entrepreneurs create new businesses, generating jobs for themselves and those
they employ. In many cases, entrepreneurial activity increases competition and,
with technological or operational changes, it can increase productivity as well.

In the United States, for example, small businesses provide approximately 75

percent of the net new jobs added to the American economy each year and
represent over 99 percent of all U.S. employers. The small businesses in the
United States are often ones created by self-employed entrepreneurs.
"Entrepreneurs give security to other people; they are the generators of social
welfare," Carl J. Schramm, president and chief executive officer of Ewing
Marion Kauffman Foundation, said in February 2007. The foundation is
dedicated to fostering entrepreneurship, and Schramm is one of the world's
leading experts in this field.

Others agree that the benefits of small businesses go beyond income. Hector V.
Baretto, administrator of the U.S. Small Business Administration (SBA),
explains, "Small businesses broaden the base of participation in society, create
jobs, decentralize economic power, and give people a stake in the future."

Entrepreneurs innovate and innovation is a central ingredient in economic

growth. As Peter Drucker said, "The entrepreneur always searches for change,
responds to it, and exploits it as an opportunity." Entrepreneurs are responsible
for the commercial introduction of many new products and services, and for
opening new markets. A look at recent history shows that entrepreneurs were
essential to many of the most significant innovations, ones that revolutionized
how people live and work. From the automobile to the airplane to personal
computers - individuals with dreams and determination developed these
commercial advances.

Small firms also are more likely than large companies to produce specialty
goods and services and custom-demand items. As Schramm has suggested,
entrepreneurs provide consumers with goods and services for needs they didn't
even know they had.

Innovations improve the quality of life by multiplying consumers' choices. They

enrich people's lives in numerous ways - making life easier, improving
communications, providing new forms of entertainment, and improving health
care, to name a few.

Small firms in the United States, for instance, innovate far more than large ones
do. According to the Small Business Administration, small technology
companies produce nearly 13 times more patents per employee than large firms.
They represent one-third of all companies in possession of 15 or more patents.

According to the 2006 Summary Results of the Global Entrepreneurship

Monitor (GEM) project, "Regardless of the level of development and firm size,
entrepreneurial behavior remains a crucial engine of innovation and growth for
the economy and for individual companies since, by definition, it implies
attention and willingness to take advantage of unexploited opportunities." The
GEM project is a multi-country study of entrepreneurship and economic
growth. Founded and sponsored by Babson College (USA) and the London
Business School in 1999, the study included 42 countries by 2006.

International and regional institutions, such as the United Nations and the
Organization for Economic Cooperation and Development, agree that
entrepreneurs can play a crucial role in mobilizing resources and promoting
economic growth and socio-economic development. This is particularly true in
the developing world, where successful small businesses are primary engines of
job creation and poverty reduction.

For all of these reasons, governments may wish to pursue policies that
encourage entrepreneurship.

The Role of the Entrepreneur

Entrepreneurs occupy a central position in a market economy. For it's the

entrepreneurs who serve as the spark plug in the economy's engine, activating
and stimulating all economic activity. The economic success of nations
worldwide is the result of encouraging and rewarding the entrepreneurial
instinct.

A society is prosperous only to the degree to which it rewards and encourages

entrepreneurial activity because it is the entrepreneurs and their activities that
are the critical determinant of the level of success, prosperity, growth and
opportunity in any economy. The most dynamic societies in the world are the
ones that have the most entrepreneurs, plus the economic and legal structure to
encourage and motivate entrepreneurs to greater activities.

For years, economists viewed entrepreneurship as a small part of economic

activity. But in the 1800s, the Austrian School of Economics was the first to
recognize the entrepreneur as the person having the central role in all economic
activity. Why is that?

Because it's entrepreneurial energy, creativity and motivation that trigger the
production and sale of new products and services. It is the entrepreneur who
undertakes the risk of the enterprise in search of profit and who seeks
opportunities to profit by satisfying as yet unsatisfied needs.

Entrepreneurs seek disequilibrium--a gap between the wants and needs of

customers and the products and services that are currently available. The
 entrepreneur then brings together the factors of production necessary to
produce, offer and sell desired products and services. They invest and risk their
money--and other people's money--to produce a product or service that can be
sold at a profit.

More than any other member of our society, entrepreneurs are unique because
they're capable of bringing together the money, raw materials, manufacturing
facilities, skilled labor and land or buildings required to produce a product or
service. And they're capable of arranging the marketing, sales and distribution
of that product or service.

Entrepreneurs are optimistic and future oriented; they believe that success is
possible and are willing to risk their resources in the pursuit of profit. They're
fast moving, willing to try many different strategies to achieve their goals of
profits. And they're flexible, willing to change quickly when they get new
information.

Entrepreneurs are skilled at selling against the competition by creating

perceptions of difference and uniqueness in their products and services. They
continually seek out customer needs that the competition is not satisfying and
find ways to offer their products and services in such a way that what they're
offering is more attractive than anything else available.

Entrepreneurs are a national treasure, and should be protected, nourished,

encouraged and rewarded as much as possible. They create all wealth, all jobs,
all opportunities, and all prosperity in the nation. They're the most important
people in a market economy--and there are never enough of them.

As an entrepreneur, you are extremely important to your world. Your success is

vital to the success of the nation. To help you develop a better business, one that
contributes to the health of the economy, I'm going to suggest that you take
 some time to sit down, answer the following questions, and implement the
following actions:

What opportunities exist today for you to create or bring new products or
services to your market that people want, need and are willing to pay for? What
are your three best opportunities?

 Identify the steps you could take immediately to operate your business
more efficiently, especially regarding internal operating systems.

 Tell yourself continually "Failure is not an option." Be willing to move

out of your comfort zone, to take risks if necessary to build your business.

 Use your creativity rather than your money to find new, better, cheaper
ways to sell your products or reduce your costs of operation. What could you
do immediately in one or both of these areas?

 Imagine starting over. Is there anything you're doing today that, knowing
what you now know, you wouldn't get into or start up again?

 Imagine reinventing your business. If your business burned to the ground

today, and you had to start over, what would you not get into again? What
would you do differently?

Importance of Entrepreneurship
Entrepreneurism has been found to be a vital part of the economy. In this
paper, I
will show evidence that entrepreneurs have a positive impact on the
economy. I will also list some of the more important influences and factors
that help people decide to become entrepreneurs. This paper will also include
some programs that can help entrepreneurs achieve success in their business
venture. In a poll conducted by the London School of Business and the
Kauffman Foundation, it was found that levels of entrepreneurship account
for significant differences amongst the countries surveyed. Over a two-year
period, ten countries were analyzed to measure the activity of entrepreneurs
and the affect they were having on the economy. These studies consisted of
in-depth interviews of over 300 experts in each country and surveys of 1,000
adults in each country (Kautz). The comparison of those countries ranking
high in entrepreneurial activity and those ranking low, showed large
differences in growth rates. Through interviews and surveys, one-third of
this difference could be traced directly back to entrepreneurs (Kautz). This
evidence shows how critical entrepreneurs are to the economy. From these
studies, recommendations were made on what each country can do to
enhance entrepreneurship. The number one recommendation stated,
“promoting entrepreneurship and enhancing the entrepreneurial dynamic of
each country should be an integral element of any government’s
commitment to boosting economic well being” (Kautz). Another
recommendation was, “Government policies and programs targeted
significantly at the entrepreneurial sector will have a more significant, direct
impact than programs simply aimed at improving the national business
context” (Kautz). It was stated that putting these recommendations into
practice would have a significant and long lasting improvement to the
economy. The most important reason why entrepreneurs help the economy is
due to the creation of new jobs. In contrast to the belief that most
entrepreneurs are those that were out of work and unable to find a job, it has
been found that 76 percent of business startups in 2003 were driven by the
desire to pursue opportunities (Cornwall). This is evidence that
entrepreneurism is not a hindrance on the economy. Furthermore, it has been
estimated that entrepreneurs have created 34 million new jobs since 1980
(Fox). Also, 70 percent of new startups were found to already employ at
least one person, and 80 percent planned to hire within the next year
(Cornwall). This data is significant evidence that entrepreneurism leads to
new jobs. This is a major contribution to the economy. Another way that
entrepreneurs have helped the economy is by innovation and research and
development. It has been found that 2/3 of all inventions come from
entrepreneurs (Fox). New inventions can improve the economy because they
can provide better ways of doing tasks, and can also lead to new business
that contribute to the economy. An obvious observation by this statistic is
that without entrepreneurs, and without all of those inventions the world
would be a much different place. Entrepreneurs have had a major impact on
the well being and strength of our economy because of these inventions.
Entrepreneurism also helps the economy by creating wealth for many
individuals seeking business opportunities. Although this is not the number
one reason individuals pursue entrepreneur activities, it plays a major role in
our economy. Both a new business, and the wealth the owner can obtain will
help boost the economy by providing new products as well as the spending
power created for the entrepreneur. Without entrepreneurs, our economy
would not benefit from the boost they give from added business and ideas.
To get an idea of what influences are important in starting a business, I
talked to my mother-in-law, who began the business Alikat Creations. She
told me that the most important influence in beginning her business was the
opportunity that she saw, and the motivation to enter business for herself.
The opportunity that she had was in the graphic arts field. As she worked in
this industry, she came across many individuals and companies that liked her
work and was interested in giving her all of their projects. Before agreeing to
start her own business from this opportunity, she had to decide whether this
was something she wanted to do. After pondering the question, she
decidedthat she liked the chance of individuality and the potential for
increased income. Without these influences, she never would have gone into
business on her own. My mother-in-law also stressed to me that another
important influence was the strong support system she had. My mother-in-
law has family that encouraged her to take advantage of the opportunity. It
was this influence and the encouragement that she received that helped her
get through some of her more difficult times. Also, she had a network of
professionals from her previous two jobs that could provide advice and help
with some of the projects she took on. My mother-in-law told me that
without the support of her family and the help from previous coworkers, she
probably would not have been as successful during the time she was in
business for herself. The most important factor that I uncovered in
entrepreneurism was the level of perceived opportunity. This coincides with
the reason why my mother-in-law began her own business. The next most
important factor I found in my research was motivation. This is the same
issue that my mother-in-law dealt with. If the person can’t find enough
motivation by the opportunity, then the business will not be pursued. As I
asked my mother-in-law about other factors for her starting her business, she
mentioned to me that financing and the availability of resources were her
biggest concerns. Luckily for her, the business she began did not require a
lot of money and she already had the equipment that she needed. As I look
into other cases, however, I have seen that many businesses fail because of
cash flow and resources. This is a very important factor that an entrepreneur
needs to take into consideration. The primary program I want to focus on
that is designed to help entrepreneurs is the Miller Business Innovation
Center. Last semester, I was in a class where some representatives of this
center came and spoke to us about their facility. This is a facility that leases
out office space to entrepreneurs at a discount rate and provides them with
equipment, training, and many other resources that may be needed to get a
business started. Also within this center, networking, mentoring, and other
activities take place amongst the entrepreneurs at the center to help grow the
business. This center is also a very useful tool to entrepreneurs to help
reduce risk. Legal, accounting, and marketing tools are also provided within
the center to help entrepreneurs. This center is located at the Miller Campus
of Salt Lake Community College in Sandy, Utah. Because of its close
proximity, this is a tool that I will consider using if and when I find an
opportunity to found a business upon. Another program that I have found
that interests me is FastTrac. This is a program founded by the Kauffman
Foundation and began at the University of Southern California. This
program is designed to train an entrepreneur with business insights,
leadership skills, and can also provide networking. This program allows
people to grow into entrepreneurs that will have the skills needed to begin a
business. Upon talking to my mother-in-law, and the study of cases and other
readings that I have done, I can see that entrepreneurship is very important
not only to the economy, but also to the individuals that decide to go into
business for themselves. In this paper, I have uncovered data and studies that
support entrepreneurship is important to the economy. I also want to give my
perception on why entrepreneurship is an important opportunity for
individuals. As was the case with my mother-in-law, entrepreneurship was
the opportunity that made her happy. Entrepreneurship is an opportunity that
can provide new and interesting challenges. The new challenges can become
very rewarding as you work through them, not only financially, but on a
personal level as well. It is very rewarding to accomplish something that
others do not, and entrepreneurism can provide this chance. This job
satisfaction is important to your self-worth. Entrepreneurism also provides a
way for you to become self-sufficient. The rewards to starting a business can
be great. This is an opportunity that I hope to have in the near future. If I can
uncover the right opportunity, I know that happiness will come from the
independence, financial rewards, and job satisfaction that will follow my
entrepreneurial activity. Then I, like other entrepreneurs, can contribute to
the economy and make this country a better place to live for all.
ROLE OF ENTREPRENEURSHIP IN ECONOMY
Entrepreneurship is basically a process of “creative destructions”. Joseph
Schumpeter (1911-1950) explains this. Established ways of doing things are
destroyed by creative, new and better ways of doing things. Entrepreneurship
therefore challenges the order of society through creative changes.
Entrepreneurship is the process and entrepreneurs are innovators who use the
process to shatter the status quo through new combinations of resources and
new methods of commerce.
 
- Joseph Schumpeter
Entrepreneur has to redirect resources from areas of low or diminishing results
to areas of high or increasing results. He has to slough off yesterday and to
render obsolete what already exists and is already known. He has to create
tomorrow.
 
- Peter Ducker (1974)
Entrepreneurship is the process of creating wealth by bringing together
resources in new ways to start a venture that benefits customers and rewards its
founders for their innovation.
 
- David H. Holt (1993)
Resources to produce results must be allocated to opportunities rather than to
problems . . . Maximization of opportunities is a meaningful, indeed a precise
definition of the entrepreneurial job. It implies that effectiveness rather than
efficiency is essential in business.
 
- Peter Drucker (1964)
Entrepreneurship plays an important role in the development of economy. Every
developed nation have benefited from their entrepreneurs in building the
economy. Bill Gate in USA is one such entrepreneur, who steered the software
industry to new heights through his Microsoft Company. In India, numerous
examples exist for successful entrepreneurs, who successively built empire of
their corporate structure. Dhirubhai Ambani grew to a phenomenal height
through Reliance industries. Jamsheedjee Tata, in Steel Industry, Pawar in
computer education are few other examples of successful entrepreneurs in
recent times.
Government is also keen to develop the entrepreneurship skill in emerging
technocrats. For this, elective courses are available in many engineering
disciplines. Concept of industrial estate has emerged during recent years. Many
big industries and engineering institutions have industrial estates in near
vicinity. For example, near Regional Engineering Colleges at Allahabad and
Jamshedpur industrial estates have been established for giving entrepreneurial
opportunities to up-coming technocrats.

Role Of Entrepreneurship In Conceptual Economy

The principle of entrepreneurship still applies in principle, but the medium has
changed drastically. This is probably the best time in our history to pursue
entrepreneurship. Entrepreneurs are defying the logic and business rationale to
make things happen individually. Gone are the days when you needed huge
capital and veteran management teams to form companies and to wait for
another several years to rake in the profit.

Markus Frind is the founder of a free dating site Plentyoffish . He spends about
two hours a day in his house managing his website that gets twelve billion page
views a year. He is the only employee in his company. By the way, did I tell
you he makes $5-6 million per year with Google ads? Similar to Markus Frind
story, another entrepreneur Dave Lu from FanPop also makes millions from his
website. Fanpop is a place where fans of anything and everything can share and
interact with fellow fans.

One trait that is common with both entrepreneurs is that each of them is
leveraging on simple inexpensive tools that are readily available to most
entrepreneurs. You might ask how these successful online ventures are relevant
to the conceptual economy. Conceptual economy encourages entrepreneurs to
use both left and right brains. Technical and subject matter experts like Markus
and Dave are not focusing solely on their technical skills. Rather, they are
conceptually leveraging on their technical skills as well as testing their creative
skills to conceptualize, design, develop and market their ideas - in most cases on
their own without any help.

Entrepreneurs must take the lead in conceptual economy. Corporate world

usually takes the back seat when it comes to adopting new ventures and most
likely will be the last group to realize and accept the arrival of this economy.
Microsoft would have never thought of starting Facebook - the highly
successful social networking site on the Internet.

What it took was the guts of a visionary young entrepreneur by the name of
Mark Zuckerberg. Mark was a Harvard dropout with a great idea that was ahead
of his time. At Harvard, Mark hacked the Harvard student records for fun and
created a networking site for his fellow students. The site became very popular.
In a short period of time, the concept has revolutionized the online social
networking scene.

In the beginning, Facebook was popular among only High School and College
students. With the recent change in their policy to include adults, the site has
seen a huge surge, providing a great social and networking platform for small
businesses and entrepreneurs. Recently, Mark turned down one billion dollar
cash offer from Yahoo! validating the notion that this is just a tip of the iceberg
and the upcoming opportunities are endless.

Potential of social networking sites like Facebook is far from being fully
realized. Imagine the power of bringing captive group of individuals from
around the world who share common interest, same values and complimenting
business opportunities. As large businesses and traditional knowledge workers
stay skeptics and try to analyze the concept, entrepreneurs have the opportunity
to run with what they believe in and bring them to life.

Eventually, this economic model will affect every aspect of the society. But for
now and probably for the next couple of decades, true beneficiaries will be the
entrepreneurs who choose to take the initiatives.

Entrepreneurship in Economic Development

What is the role of entrepreneurship in economic development? At a minimum
the answer should be able to explain the role of entrepreneurs in the structural
transformation of countries from low income, primary-sector based societies
into high-income service and technology based societies. More broadly though,
it should also be able to explain the role of entrepreneurs in the opposite pole of
stagnating development (including conflict) and in high innovation-driven
growth. Although economic development lacks a ‘general theory’ of
entrepreneurship, which could encompass a variety of development experiences,
much progress has been made in extending the understanding of
entrepreneurship in the process of development. This paper surveys the progress
with the purpose of distilling the outlines for a more general theory of
entrepreneurship in economic development. Entrepreneurship in developing
countries remains a relatively under-researched phenomenon, so by surveying
the current state of research, and by discussing the role of entrepreneurship in
dual economy models of structural transformation and growth, a secondary
objective of this paper is to identify avenues for further research. Finally, the
policy implications from the economic literature suggest that a case for
government support exists, and that this should focus on the quantity, the
quality, and the allocation of entrepreneurial ability. Many routinely adopted
policies for entrepreneurship, such as provision of credit and education, are
shown to have more subtle effects, not all of which are conducive to growth-
enhancing entrepreneurship.

Entrepreneur
An entrepreneur is a person who has possession of a new enterprise, venture or
idea and is accountable for the inherent risks and the outcome.[1][note 1] The term
was originally a loanword from French and was first defined by the Irish-French
economist Richard Cantillon. Entrepreneur in English is a term applied to a
person who is willing to launch a new venture or enterprise and accept full
responsibility for the outcome. Jean-Baptiste Say, a French economist, is
believed to have coined the word "entrepreneur" in the 1800's - he defined an
entrepreneur as "one who undertakes an enterprise, especially a contractor,
acting as intermediatory between capital and labour".

Types of entrepreneurs

[edit] Social entrepreneur

A Social entrepreneur is motivated by a desire to help, improve and transform
social, environmental, educational and economic conditions. Key traits and
characteristics of highly effective social entrepreneurs include ambition and a
lack of acceptance of the status quo or accepting the world "as it is". The social
entrepreneur is driven by an emotional desire to address some of the big social
and economic conditions in the world, for example, poverty and educational
deprivation, rather than by the desire for profit. Social entrepreneurs seek to
develop innovative solutions to global problems that can be copied by others to
enact change.[6]
Social entrepreneurs act within a market aiming to create social value through
the improvement of goods and services offered to the community. Their main
aim is to help offer a better service improving the community as a whole and
are predominately run as non profit schemes. Zahra et al. (2009: 519) said that
“social entrepreneurs make significant and diverse contributions to their
communities and societies, adopting business models to offer creative solutions
to complex and persistent social problems”.

[edit] Serial entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and
starts new businesses.[7] In the media, the serial entrepreneur is represented as
possessing a higher propensity for risk, innovation and achievement. Serial
entrepreneurs are more likely to experience repeated entrepreneurial success.
They are more likely to take risks and recover from business failure.[8]

[edit] Lifestyle entrepreneur

A lifestyle entrepreneur places passion before profit when launching a business
in order to combine personal interests and talent with the ability to earn a living.
Many entrepreneurs may be primarily motivated by the intention to make their
business profitable in order to sell to shareholders. In contrast, a lifestyle
entrepreneur intentially chooses a business model intended to develop and grow
their business in order to make a long-term, sustainable and viable living
working in a field where they have a particular interest, passion, talent,
knowledge or high degree of expertise.[9] A lifestyle entrepreneur may decide to
become self-employed in order to achieve greater personal freedom, more
family time and more time working on projects or business goals that inspire
them. A lifestyle entrepreneur may combine a hobby with a profession or they
may specifically decide not to expand their business in order to remain in
control of their venture. Common goals held by the lifestyle entrepreneur
include earning a living doing something that they love, earning a living in a
way that facilitates self-employment, achieving a good work/life balance and
owning a business without shareholders. Many lifestyle entrepreneurs are very
dedicated to their business and may work within the creative industries or
tourism industry,[10] where a passion before profit approach to entrepreneurship
often prevails. While many entrepreneurs may launch their business with a clear
exit strategy, a lifestyle entrepreneur may deliberately and consciously choose
to keep their venture fully within their own control. Lifestyle entrepreneurship
is becoming increasing popular as technology provides small business owners
with the digital platforms needed to reach a large global market.
Entrepreneurship and the
New Economy

Sometime ago, I met with several people who were in training to become
entrepreneurs or small business owners. Following discussions with them, I
realized the extent to which the world of work, as we have known it, has
radically changed.

In the old work world, large companies were perceived as social welfare
providers, supplying jobs to citizens. Now, they are viewed as job destroyers.
Moreover, thousands of workers are being scratched from government payrolls
as well. Both the state and large companies are disengaging from their previous
social welfare roles.

To avoid a crisis without precedent, the governing elites are trying to convince
citizens to become more autonomous and to become entrepreneurs: This would
relieve government from spending for social security programs and would also
provide companies with the customers they need but are reluctant to create
anymore.

Is it possible to change a large portion of the working force into independent

entrepreneurs without making them middle-age itinerants?

According to some recent statistics from Canon Corporation and the American
Association. of Home-Based Businesses, more than 46 million Americans now
work full- or part-time in home-based businesses. Their average age is 48, and
their average 1995 yearly gross income was $34,500. Why did these Americans
opt to start home-based businesses?

Here are some of the reasons they gave:

Desire for independence -- 69%

Income opportunity -- 38%
Didn't like large company -- 33%
Needed a change -- 30%
Had a great idea -- 25%
Were downsized out of an existing job -- 20%

These numbers, particularly the average age, lead me to conclude that qualified
and experienced people are not greatly interested in trying to fulfill themselves
in conventional jobs that mean being under the direction of another person. In
addition, the average income reported by persons with home-based businesses
suggests that it is not the American dream that makes these people seek
autonomy and entrepreneurial opportunities. It must be something else.

Many of us are now using communication tools such as cable television,

modems, additional telephone services, interactive TV, electronic mail, and the
Internet at home. The explosion of information available at home changes the
rules of the game and allows independent entrepreneurs to compete
advantageously with large companies. The stakes are high in terms of market
and quality of service because the leading segment of the work force is or will
become autonomous.

Let us go back on the issue of whether large numbers of people will be

transformed into middle-age itinerants and how this can be prevented. The
success or failure of such a social revolution brings up the question of the
training necessary for persons who want to become successful independent
entrepreneurs. In my judgment, here are five major challenges that independent
entrepreneurs are facing:

To use a business plan

In practice, the business plan has three purposes: 1) to please government
agencies that require it for subsidies or for startup support, 2) to obtain
monetary assistance from financial institutions, and 3) to provide objectives and
a frame of action for the entrepreneur. When the first two are no longer
required, entrepreneurs need not feel bound by their business plans. A business
plan should not be a straight-jacket, but only a starting point, providing initial
direction from which one can deviate as market conditions change or with the
emergence of new business opportunities.

To offer a product or service that is changeable, adaptable, ad-hoc, or

tailor-made
In the new economy, companies cannot afford to maintain their positions by
offering product lines that cannot be alterable without major efforts and massive
capital. Markets are so unstable, consumers so unpredictable, that a company
has no other choice but to improve its products and develop new ones to stay in
business. The software industry saw hundreds of companies collapse because
they did not adapt to change. Independent entrepreneurs can more easily
respond to small, highly specialized markets and can be more flexible, changing
direction more quickly than large conventional companies. The new economy
offers many opportunities for independent entrepreneurs.

To know basic marketing principles and sales techniques

Even with the best marketing strategy, it is necessary to know basic sales
techniques in order to successfully market a product or service. This means that
on top of a marketing strategy, the entrepreneur must be able to close a sale
directly with the client. Failure to do this will destroy the business. Avoid
counseling on marketing strategies from people who have never started a
business themselves. For instance, career teachers or governments employees
probably know only the theory. Nothing is worth more to independent
entrepreneurs than advice based on practical experience in marketing and sales.

To learn the basic principles of accounting

For all active companies, the struggle for survival relies on this simple
accounting principle: revenues must be superior to spending over a certain
period of time. The autonomous worker must know the mechanics of
accounting and always have in his mind a clear picture of his/her financial
position. As far as I'm concerned, the worst resources to go to in this area are a
bank's representatives. Their counseling is often a pretext for financial analysis
finding out if a loan or a credit margin can be sold. Instead, entrepreneur should
review their financial positions with independent accountants or analysts. As the
founder of Quebecor, a major Canadian company, has said, "The banks shall be
treated as suppliers!"

To get away from the employee-worker mentality

Many people still believe that methods for obtaining high performance that
were developed in the industrial world must necessarily apply to independent
entrepreneurs. For instance, some insist on maintaining rigid regular work hours
at home, even though the independent entrepreneur has complete control over
his/her time. A truly independent entrepreneur need not impose the old
industrial 9 to 5 concept on him or herself, but, instead, can use time as a
flexible resource.

These challenges for the independent entrepreneur are nothing compared to

what governments and large companies are likely to face in determining the
eventual success or failure of the workforce metamorphosis. They will have to
cope with a new social reality in which their own role will be diminished.

ROLE OF ENTREPRENEURSHIP IN THE ECONOMY AND SOCIETY

One of the inherent characteristics of the concept of entrepreneurship and

which hampers research on the subject is that scholars have yet to come up with
a unanimous description and explanation for it. One of the first individuals to
recognise its importance in economic theory was Richard Cantillon who said
that “The farmer is an entrepreneur who promises to pay the landowner, for his
farm or land, a fixed sum of money without assurance for the profit he will
derive from his enterprise”. It should be noted that other analysts have focused
their research on the traits and personal characteristics of entrepreneurs in an
attempt to understand and explain entrepreneurship. In the research for the
psychological traits of an entrepreneur, McClelland attempts to explain
entrepreneurship by the need for achievement. Other studies have also noted
other characteristics of successful entrepreneurs like internal locus of control,
low aversion to risk taking, aggressiveness, ambition, over-optimism, desire for
autonomy, personal values and need for power. From these diverse explanations
for entrepreneurship, the role of an entrepreneur can thus be derived.
From the onset, whether an individual is into entrepreneurship for purely profit
margins or to promote social value, the fact is that the multiplier effects which
will come about as a result of his activities will be highly beneficial to the
economy and society. It is important to stress that entrepreneurs are present in
all settings, however cultural explanations for a lack of entrepreneurship
overlook what people have in common – namely alertness for profit and to
improve their general situations. Underdeveloped nations do not lack
entrepreneurship. Rather, entrepreneurial activities exist, but are not directed
toward productive ends conducive to economic progress.
At this point of directing entrepreneurship activities towards progressive ends is
where my personal testimony begins. During my higher education studies at the
University of Nairobi (UoN), I was a member of the Students in Free Enterprise
(SIFE), a partnership between business and higher education with a view of
preparing the next generation of entrepreneurs and business leaders to create a
better world for all. University teams are concerned with improving the quality
of life and standard of living through projects which Entrepreneurs see change
as the norm and as healthy. Usually they do not bring about the change
themselves. But – and this defines entrepreneur and entrepreneurship – the
entrepreneur always searches for change, responds to it, and exploits it as an
opportunity. – Peter Drucker
educate on: Market economics, Financial literacy, Business ethics,
Entrepreneurship, Success skills, Environmental sustainability and
Team/Project sustainability.
One of the projects that l took part in when l joined the University of Nairobi
SIFE (UoN SIFE) team was the Kibera Media House project. This involved
reviving a community media house in Kibera and helping set up a journal,
Kibera Journal. When we first came into the picture, the media house had been
brought to its knees by incessant wrangling between the administration,
untrained journalists, lack of funds and donor interference. After a few
reconnaissance visits where we got to know about the background of the Kibera
Media House, we sourced for well trained journalists from Kibera and trained
them on the SIFE pillars. We then helped them develop a sustainable business
model which would ensure the sustainability of the Kibera Journal once we
pulled out of the project and lastly, we connected them with different business
organizations which would be willing to partner with them. Kibera Journal was
launched in May 2007 amid much pomp and fanfare. Our hard work paid off as
Kibera Journal managed to get Radio Simba to buy advertising space worth
Kshs 250,000 for the upcoming editions of the journal. So far, Kibera Journal is
still going on strong. In this particular project, we enhanced the flow of
information in the community and at the same time enabled them to do it in a
way which put some money in their pockets and thus played a part in raising
their standards of living. And most importantly of all, it set me firmly on the
entrepreneurial path.
Entrepreneurship as a whole contributes to social wealth by creating new
markets, new industries, new technology, new institutional forms, new jobs and
net increases in real productivity. The jobs created through their activities in
turn lead to equitable distribution of income which culminates in higher
standards of living for the populace. In this way, the resources available to the
government will likewise increase and hence enable it to offer social services
like hospitals and schools, develop the infrastructure and keep law and order. To
cap it all, the Global Entrepreneurship Monitor Project, a comparative
international study assessing entrepreneurship’s importance to economies
worldwide concluded that the correlation between the level of entrepreneurial
activity and economic growth is greater than 70% and all nations with high
levels of entrepreneurial activity have above-average rates of economic growth.
Entrepreneurs see change as the norm and as healthy. Usually they do not
bring about the change themselves. But – and this defines entrepreneur and
entrepreneurship – the entrepreneur always searches for change, responds to
it, and exploits it as an opportunity. – Peter Drucker

One of the inherent characteristics of the concept of entrepreneurship and

which hampers research on the subject is that scholars have yet to come up with
a unanimous description and explanation for it. One of the first individuals to
recognise its importance in economic theory was Richard Cantillon who said
that “The farmer is an entrepreneur who promises to pay the landowner, for his
farm or land, a fixed sum of money without assurance for the profit he will
derive from his enterprise”. It should be noted that other analysts have focused
their research on the traits and personal characteristics of entrepreneurs in an
attempt to understand and explain entrepreneurship. In the research for the
psychological traits of an entrepreneur, McClelland attempts to explain
entrepreneurship by the need for achievement. Other studies have also noted
other characteristics of successful entrepreneurs like internal locus of control,
low aversion to risk taking, aggressiveness, ambition, over-optimism, desire for
autonomy, personal values and need for power. From these diverse explanations
for entrepreneurship, the role of an entrepreneur can thus be derived.
From the onset, whether an individual is into entrepreneurship for purely profit
margins or to promote social value, the fact is that the multiplier effects which
will come about as a result of his activities will be highly beneficial to the
economy and society. It is important to stress that entrepreneurs are present in
all settings, however cultural explanations for a lack of entrepreneurship
overlook what people have in common – namely alertness for profit and to
improve their general situations. Underdeveloped nations do not lack
entrepreneurship. Rather, entrepreneurial activities exist, but are not directed
toward productive ends conducive to economic progress.
At this point of directing entrepreneurship activities towards progressive ends is
where my personal testimony begins. During my higher education studies at the
University of Nairobi (UoN), I was a member of the Students in Free Enterprise
(SIFE), a partnership between business and higher education with a view of
preparing the next generation of entrepreneurs and business leaders to create a
better world for all. University teams are concerned with improving the quality
of life and standard of living through projects which Entrepreneurs see change
as the norm and as healthy. Usually they do not bring about the change
themselves. But – and this defines entrepreneur and entrepreneurship – the
entrepreneur always searches for change, responds to it, and exploits it as an
opportunity. – Peter Drucker
educate on: Market economics, Financial literacy, Business ethics,
Entrepreneurship, Success skills, Environmental sustainability and
Team/Project sustainability.
One of the projects that l took part in when l joined the University of Nairobi
SIFE (UoN SIFE) team was the Kibera Media House project. This involved
reviving a community media house in Kibera and helping set up a journal,
Kibera Journal. When we first came into the picture, the media house had been
brought to its knees by incessant wrangling between the administration,
untrained journalists, lack of funds and donor interference. After a few
reconnaissance visits where we got to know about the background of the Kibera
Media House, we sourced for well trained journalists from Kibera and trained
them on the SIFE pillars. We then helped them develop a sustainable business
model which would ensure the sustainability of the Kibera Journal once we
pulled out of the project and lastly, we connected them with different business
organizations which would be willing to partner with them. Kibera Journal was
launched in May 2007 amid much pomp and fanfare. Our hard work paid off as
Kibera Journal managed to get Radio Simba to buy advertising space worth
Kshs 250,000 for the upcoming editions of the journal. So far, Kibera Journal is
still going on strong. In this particular project, we enhanced the flow of
information in the community and at the same time enabled them to do it in a
way which put some money in their pockets and thus played a part in raising
their standards of living. And most importantly of all, it set me firmly on the
entrepreneurial path.
Entrepreneurship as a whole contributes to social wealth by creating new
markets, new industries, new technology, new institutional forms, new jobs and
net increases in real productivity. The jobs created through their activities in
turn lead to equitable distribution of income which culminates in higher
standards of living for the populace. In this way, the resources available to the
government will likewise increase and hence enable it to offer social services
like hospitals and schools, develop the infrastructure and keep law and order. To
cap it all, the Global Entrepreneurship Monitor Project, a comparative
international study assessing entrepreneurship’s importance to economies
worldwide concluded that the correlation between the level of entrepreneurial
activity and economic growth is greater than 70% and all nations with high
levels of entrepreneurial activity have above-average rates of economic growth.
Entrepreneurs see change as the norm and as healthy. Usually they do not
bring about the change themselves. But – and this defines entrepreneur and
entrepreneurship – the entrepreneur always searches for change, responds to
it, and exploits it as an opportunity. – Peter Drucker
With this in mind, it would be thus prudent to see how we can promote
entrepreneurship among the populace so as to tap into the benefits that will
accrue from this approach. The SIFE initiative is a step in this direction as it
seeks to promote entrepreneurship as an alternative to formal employment. An
important aspect that comes out is how the culture of entrepreneurship can be
promoted; the fact that university students are the movers of the projects enables
them to understand the tenets of entrepreneurship, inculcates the spirit of
(social) entrepreneurship in them and imbues in them the option of becoming
entrepreneurs and not going into formal employment. This is especially
important for a country like Kenya which has over 65% of the population as
being youth, of whom 2.5 million are unemployed and who many analysts
consider a “ticking time bomb” as a projected increase in their number’s could
spark a people’s revolution.
Being a self confessed aspiring entrepreneur, l will use my country Kenya as an
example and lay out the constraints that l and my ilk face with the most easily
encountered one being bureaucratic procedures in starting a business and
corruption in the relevant government offices which consequently eats time and
raises the cost of starting a business. Other problems are inadequate
infrastructure which raises the cost of doing business and risk of political
instability in the run-up to the constitutional referendum to be held in August
2010 which specifically affects the tourism industry. However in my opinion, l
believe the greatest impediment to entrepreneurs in a country like Kenya is the
lack of a culture which appreciates its role. Just the other day, l went to the
Registrar of Companies for a simple name search for a new business that l want
to launch with my business partner. Pasted to the main entrance is a huge poster
which outlines the services, time frame, amount of fees charged and other
procedures. It stated that a name search takes 3 days yet the actual number of
days is actually a week. I could just picture the officers coughing and sneezing
as they went through old and dusty files to confirm that the name l wanted was
free.
Kenya as stated earlier, has a high population which is youthful and obviously,
the government can not create jobs for all of them; the private sector if provided
with a conducive environment will go a long way in reducing this number but
our aim is for the attainment of a middle income status for the Kenyan
population by 2030 as per Kenya’s economic blueprint. In order to attain this
status, entrepreneurship is the key and the youth are the holders of this key.
America is a proper example of how entrepreneurship can move
with this in mind, it would be thus prudent to see how we can promote
entrepreneurship among the populace so as to tap into the benefits that will
accrue from this approach. The SIFE initiative is a step in this direction as it
seeks to promote entrepreneurship as an alternative to formal employment. An
important aspect that comes out is how the culture of entrepreneurship can be
promoted; the fact that university students are the movers of the projects enables
them to understand the tenets of entrepreneurship, inculcates the spirit of
(social) entrepreneurship in them and imbues in them the option of becoming
entrepreneurs and not going into formal employment. This is especially
important for a country like Kenya which has over 65% of the population as
being youth, of whom 2.5 million are unemployed and who many analysts
consider a “ticking time bomb” as a projected increase in their number’s could
spark a people’s revolution.
Being a self confessed aspiring entrepreneur, l will use my country Kenya as an
example and lay out the constraints that l and my ilk face with the most easily
encountered one being bureaucratic procedures in starting a business and
corruption in the relevant government offices which consequently eats time and
raises the cost of starting a business. Other problems are inadequate
infrastructure which raises the cost of doing business and risk of political
instability in the run-up to the constitutional referendum to be held in August
2010 which specifically affects the tourism industry. However in my opinion, l
believe the greatest impediment to entrepreneurs in a country like Kenya is the
lack of a culture which appreciates its role. Just the other day, l went to the
Registrar of Companies for a simple name search for a new business that l want
to launch with my business partner. Pasted to the main entrance is a huge poster
which outlines the services, time frame, amount of fees charged and other
procedures. It stated that a name search takes 3 days yet the actual number of
days is actually a week. I could just picture the officers coughing and sneezing
as they went through old and dusty files to confirm that the name l wanted was
free.
Kenya as stated earlier, has a high population which is youthful and obviously,
the government can not create jobs for all of them; the private sector if provided
with a conducive environment will go a long way in reducing this number but
our aim is for the attainment of a middle income status for the Kenyan
population by 2030 as per Kenya’s economic blueprint. In order to attain this
status, entrepreneurship is the key and the youth are the holders of this key.
America is a proper example of how entrepreneurship can move