Value of entrepreneurship to emerging economies - Assignment Example

? VALUE OF ENTREPRENEURSHIP TO EMERGING ECONOMIES VALUE OF ENTREPRENEURSHIP TO EMERGING ECONOMIES Introduction A very unique feature and characteristic of the global market, a perfect reflection of which could be paralleled to the structure of any country is that it is made up people from different socio-economic backgrounds, each of which plays a contributory role towards the collective success of the market. As far as emerging markets are concerned, they can be compared to those players on the market who trade in not so huge forms of business, but yet, having the little contributions they bring on the market, significant enough to be counted as part of collective growth and development (Sandee, Isdijoso and Sulandjari, 2002). But for the roles and contributions of these emerging markets to be felt in a perfect sense, there are some key inputs that must be present. One of these is the contributory roles that entrepreneurship plays in the emerging markets (Acs and Szerb, 2007). Generally, an emerging market may be described as a country that has social and economic activity climate that is set on the lines of rapid growth and development (Liedholm, 2002). Because entrepreneurs have a common goal of investing in markets, their contributions to these markets have been studied in several works of literature. In this paper, five major points that make a case for the value of entrepreneurship in Brazil as an emerging market are discussed. Increased Competitive Pressure In Brazil, the political environment allows that there can be as many entrepreneurship openings as possible. With such policy, the private sector, most of which have been controlled by entrepreneurship have had so much grounds to operate. Currently, there are several entrepreneurial based companies and businesses operating in the country. Generally, the size and economic worth of these entrepreneurial businesses are not seen to be as huge as those that are presented by multinational and international companies (Valliere and Peterson, 2009). However, because the entrepreneurial businesses have their own market and client base, it has always been important for them to engage in increased competitive marketing to ensure their survival. Economically, as these increased competitive pressures take place, entrepreneurs are forced to be rigorous on the emerging market, injecting capital into their businesses. On a larger scale, the fact that these enterprises are competitive enough and have higher asset base, revenues, capital, and manpower base, they contribute to the collective expansion and growth of the emerging markets in which they find themselves (Sandee, Isdijoso and Sulandjari, 2002). In Brazil, there are multinational companies that started merely as enterprises but due to the competition that they received from other enterprises and the need for them to be proactive in their growth; they have today become key stakeholders in that emerging market. Exploitation of Innovation Valliere and Peterson (2009) note that most entrepreneurial based companies and businesses in emerging markets are forced to engage in the exploitation of innovation because that is the only way by which they can be competitive against traditional multinational companies. Through the exploitation of innovation, these enterprises have critically gone into research and development to understudy marketing trends and principles that works best with the local markets in which they operate (Williams, 2009). Part of the exploitation of innovation has also included the need to use highly skilled and talented human resource within the corridors of the markets in which they find themselves to growth their business. Invariably, entrepreneurship has been valuable in ensuring that the emerging markets as a collective entity, rather than their enterprises alone are borne on the wings of innovative business. As it will be noted a major characteristic of developed markets is the abundance of innovation (Valliere and Peterson, 2009). As entrepreneurship aids in making the emerging markets innovative in their corporate business operations thereof, it pushes the emerging markets closer to that level where they become developed enough to engage in global competition. Enhancement of Human Capital Without sufficient jobs for the local people, markets cannot grow to a level that can be referred to as emerging markets. This is because where there are no jobs for the local people there will either lack of labor and manpower for the local businesses within the market or labor will be very expensive. Meanwhile, Tambunan (2008), notes that most small and medium scale enterprises generate primary and secondary sources of jobs for several households. Apart from the fact that the jobs created by these enterprises serve as the source of income and livelihood for the local people and thereby improving their living conditions, the jobs serve as human capital boost for the emerging markets. In Brazil, a recent study revealed that most skilled laborers who have taken up very top executive positions in multinational and other foreign direct companies actually started off their experience with positions from entrepreneurs who allowed them to manage their enterprises (Liedholm, 2002). The value of entrepreneurship could therefore be seen as breeding grounds for exotic labor force that keep the emerging markets well skilled and knowledgeable in business operations. Alternative Venture for Growth Entrepreneurship has been identified to be an important avenue for alternative venture for growth in emerging markets. This is because in the absence of entrepreneurship, most of the business operation outfits in these markets would have been controlled by state and government controlled agencies and institutions. Meanwhile an emerging market such as Brazil has been said to have a public sector that cannot account for even half of the nation’s economic needs (World Bank, 2004). This means that the current gross domestic product (GDP) of Brazil, half of it would not have existed if the private sector was eliminated from active economic activity. The value of entrepreneurship in Brazil and for that matter emerging markets can be found as that it helps in giving the populace alternatives to trade and economic activities and thereby enhancing growth of the country’s GDP. What is more, it has been said that the presence and alternatives that these enterprises give on the emerging markets serve as yardstick for state and government businesses to be proactive because these state and government businesses see themselves as being competition with the private enterprises. Engine for the development of local economies and communities Tambunan (2008) has noted that because most entrepreneurs work with the very indigenous labor force, they are often offered the opportunity of coming very close to the core needs and challenges of the ordinary people. To this end, through entrepreneurship, there is the provision of people based and people centered development of local economies and communities (Tambunan, 2008). In effect, saying that the value of entrepreneurship is in serving as the engine of growth for the local economies and communities is a right argument. In an emerging market like Brazil, it has been established that government assisted development is centered in the Southwestern part of the country alone (Liedholm, 2002). The effect of such a situation is that it makes the distribution channel highly inactive and cost effective. Generally therefore, trading in such an emerging market becomes challenging and stagnant to foreign investment. But as entrepreneurs open up the local market and ensure equal distribution of business resources throughout the country, the emerging market becomes lucrative for further growth and expansion. Conclusion From the discussions so far, the value of entrepreneurship in emerging markets with Brazil as a case study has clearly been outlined. Based on the discussions so far, a couple of conclusions can be made for the debate of the value of entrepreneurship in emerging markets. First, it can be concluded that in the absence of entrepreneurship, there would be no competition and for that matter, checks and balances for the public sector, which has had a history in emerging markets as the largest shareholder of those markets (Acs and Szerb, 2007). Comparatively, it has been realized that emerging markets that practice a form of governance that does not promote entrepreneurship do not record the form of rapid growth experienced in other economics where there is free market (World Bank, 2004). Entrepreneurship is therefore necessary and valuable as a form of competitive yardstick for governments. Finally, it can be concluded that the value of entrepreneurship in emerging markets is vested in the improvement of lives that it gives to the indigenes and that in the absence of entrepreneurship in most of these emerging markets like Brazil, the economic wellbeing of the populace would not have measured up to the standards that we find them today. If these standards had not come about also, the local people would not have had the bargaining power to engage effectively in business in those markets and so growth on those markets would have been stagnant (Williams, 2009). Reference List Acs ZJ and Szerb L (2007) Entrepreneurship, economic growth and public policy. Small Bus Econ 28(2–3):109–122 Liedholm C (2002) Small firm dynamics: evidence from Africa and Latin America. Small Bus Econ 18(1–3):227–242 Sandee H, Isdijoso B, Sulandjari S (2002) SME clusters in Indonesia: an analysis of growth dynamics and employment conditions. International Labor Office (ILO), Jakarta Tambunan T. (2008) SME development, economic growth, and government intervention in a developing country: The Indonesian story. Journal of International Entrepreneurship. 6:147–167 Valliere D. and Peterson R. (2009). Entrepreneurship and economic growth: Evidence from emerging and developed countries. Entrepreneurship & Regional Development. 21 (5–6), 2009, pp.459–480 Williams C. C. (2009). Evaluating the motives of informal entrepreneurs: Some lessons from Ukraine. Journal of Developmental Entrepreneurship. 14 (1) pp. 59–71 World Bank (2004) “SME”, World Bank Group Review of Small Business Activities. World Bank,Washington, DC Read More