Importance and Role of SMEs to the UK Economy - Assignment Example

New Venture Creation Exam Questions Questions a. Importance and role of SME to the UK economy Being innovative: SME makes innovation in the economy so successful despite the harsh economic climate. As a result of their extent, SMEs are better at pinpointing and embracing new styles in the industry and consequently, lashing the innovation within their individual sectors. This permits SMEs to be pioneers in evolving technologies, giving the way for bigger and bolder investments. Absence of innovation is unscrupulous for any economy. A flourishing SME ecosystem certifies that products and services don’t drop behind the competition and that the firms are in fact able to make a change on the market (Blackburn, 2012). Adapting to change: it can be much more adaptable to adjustment than larger and more compound organizations. Because of this, SMEs questionably have a better opportunity of enduring difficult economic states and they are quicker at recovering from crises. In defeating the declines, these companies are able to exploit and encourage competition, which is vital for putting the present economic lethargy behind. Such adaptability in turn brings more equilibrium to the economic development of the UK and warrants that local communities partake in stimulating development (Blackburn, 2012). Partnership with larger businesses: Even though these two key benefits in the current climate, one of the main obstacles to achievement for SMEs is a weakness in linking and partnering with big businesses. A couple of years ago, small business proprietors felt deserted by the UK regime but this state is gradually changing. A support from firms like Fujitsu meant that small businesses would interchange skills and receive mentoring and management from more skilled players. Many of these firms begin as small, start-up initiatives - limited people with great ideas and the ambition to understand them, whose symbols are now internationally recognized. Small businesses comprises 99 per cent of all firms in the UK and can be actual initiators of economic development, creating job prospects for local communities and creating income. But in order to keep the force developed, the regime must support the joint efforts. (Blackburn, 2012) b. Why there has been an increase in SME in the past few decades. This has been associated with the Business angels increasing their funding to SME. Business angels are high net worth personnel that finance small developing businesses through a parity stake. They have been an important source of finance for SMEs for the last decades of years. This has been possible by such individuals giving funding to SME to facilitate their smooth running. The other factor that has led to the growing number of the SME is the government initiatives in the financing of the funds and protecting the SME. This has been possible by strategizing plans like; targeting a well-known market failure, exploiting impact, working with the market, and Ensuring schemes are cost effective. All these strategies ensures that the running of the SME is perfect, hence there favorable growth. (Blackburn, D. M. S., 2012) This increasing number of SMEs has really raised the economy of many countries, for example the UK. This will facilitate the growth for uphold of the economies of such countries. 2 a. evolution of the idea of entrepreneurship Entrepreneurship is a term, which has evolved over the years. Formerly, entrepreneurs were doing a lot of things that it widened the true definition of an entrepreneur. The definition of an entrepreneur was that person who assumes to establish, manage, and accept the perils of a business. In the 21st century, entrepreneurs are perceived as innovators or originators, who recognize and grab opportunities. These kinds of people are also accountable for changing the opportunities into workable and marketable notions. This has made the term entrepreneur to change from the meaning of risk-takers to the versatile one in the 21st century, signifying risk takers, inventors, marketers, innovators, organizers, managers, and organizers. Such are the features normally possessed by an entrepreneur. (Blackburn, 2012). b. how the understanding of entrepreneurship has changed over time In a few years ago, entrepreneurship has been among the fast developing areas of economic and business importance and research in the entire world. Such growing in this area has established alongside interest in the fluctuating role of small corporate. This has been witnessed such that small ventures develop faster than larger companies. This has seen large firms fortifying jobs while small firms creating new opportunities. This raised significance is also owing to some chief changes in the business setting including harsh international as well as local competition, abrupt and unanticipated alteration of the demand, the acceleration of the high-tech advancement, and subsequently, the rise of risk. Innovation, direct adoption, reply to variation, and entrepreneurial conduct have become important, not only for growing but also for existence of the corporate. This has aided us understand changes that the entrepreneurship sector has gone through so that it may meet the need for the growing economy. ( Blackburn, 2012) 3 a. unique nature of franchising The joint beneficial association that holds between franchisors and franchisees elevates franchising to be a unique business.  It gives entrepreneurs an affordable way of accelerating development and achieving growth goals more swiftly than the case.  Likewise, franchisees have a head start since the support delivered by the franchise system.  Franchising denotes being in business for yourself but not by yourself.  Whether its finance and accounting, marketing and public associations, personnel organization, buying, or inventory control, franchisors are there to give a hands on, one-to-one help. While franchising does give chances, it does not generate miracles.  Franchisees conglomerate resource and knowledge with entrepreneurial effort and spirit to formulate a business association unique to franchising.  It is a field of growing economic prospect in which each and every individual can play a part established on dedication, talent, and initiative. (Blackburn, 2012) b. the aspects of franchise that makes it successful77k, There are a number of trends connected with the use of technology in franchising nowadays that has made it successful.  Firstly, a number of franchisors use the web to connect with franchise proprietors and suppliers by the use of secure extranets so as to share acute information, enable discussion among the franchise linkage, post procedures manuals and updates, publicize news about advertisement campaigns, participate in supply chain administration, and collect sales reports inevitably.  Secondly, they use the internet to advertise their network to clients.  Thirdly, some use the internet to participate in business-to-consumer e-commerce, often with the participation of franchisees.  Fourthly, potential franchisees assemble information and make interaction with franchisors using the net.  Fifthly, some have begun providing exposes to potential franchisees by electronic means.  Sixthly, they make widespread use of technology in presenting their services directly to clients. All these have contributed to the success of the operation of franchise. (Blackburn, 2012) c. key socio-economic influences which have contributed towards the growth of franchise For instance, the demand for domestic cleaning franchise is due to a number of issues. The socio-economic aspects that have led to a sustained development in demand for domestic cleaning services over the latest years including: augmented level of earnings, mainly among dual-income household, a steady growth in the numbers of women working outside the home, a move in family urgencies and a concentrates on leisure over domestic accountabilities, and an increased social reception of having aid in the home. 4 a. importance of companies to cultivate innovation through entrepreneurship Entrepreneurship yields financial advance and sustains the economy afloat, which results into the significance of innovation in entrepreneurship. Entrepreneurs are reformers of the monetary. Not only the scientist who discovers and come up solutions to the embedding issues. (Blackburn, 2012) The significance of innovation in entrepreneurship is depicted by coming up with the latest way in producing a product or an elucidation. A service cooperate can increase with another kind of service to satisfy the ever fluctuating needs of their customers. Producers can come up with other products from the raw materials and by-products. The significance of innovation in entrepreneurship is another major value for the durability of a corporate. Entrepreneurs and corporates began with a necessity. They saw the essential within the community and amid themselves that they have formulated a standing solution. They capitalized the prospect to innovate and make the lives more relaxed. Such results kept developing to make it more useful, better, and easier. Entrepreneurs are to keep themselves well-informed with the trading trends and consumer wants. Manufacturers are continuously innovating to yield more without foregoing the quality. (Blackburn, 2012) b. strategies adopted in a pursuit of Entrepreneurship culture The strategies for the adoption of the best entrepreneurship culture include; Inspire the chase of a fulfilling, meaningful, and productive life for each proprietor. Describes an entrepreneurial culture for the household. Isolated the sleep-well possessions from the risk-taking assets The family business assets is put first in the hands of proprietors and managers who are well-versed risk takers. Restore household assets after each 50 years, this will cause absence of standing still. Describing responsible possession for each generation founded on the encounters at hand. d. Barriers to entrepreneurship There are clear barriers that obscure the entrepreneurship process. This is apparent from the point that the cultural values in the society are bound by; status-quo, strong cultural taboos, rituals, conventionalism, etc. Such cultural obstacles to entrepreneurship may limit the entrepreneurial ague (Blackburn, 2012), For example, in the ancient times, some societies in India heart broke people from going overseas believing that going beyond the sea was a cultural taboo. Likewise certain field of work were perceived unfitting for people of culture. Such strong cultural dictates can act a strong barriers to the development of entrepreneurship. Works Cited Professor Robert Blackburn, D. M. S., 2012. Government, SMEs and Entrepreneurship Development: Policy, Practice and Challenges. United Kingdom: Gower Publishing, Ltd. Read More