Current Entrepreneurship - Research Paper Example

ECON 3505 “Current Entrepreneurship” Abdulah Almaim Dr. Constantine E. Passaris 3305203 Table of Contents Introduction 3 Entrepreneurial Role in the Economy 3 Impact of Information Technology on Entrepreneurship 6 Innovation 10 Conclusion 12 References………………………………………………………………………………………13 Current Entrepreneurship Introduction Entrepreneurship has of late undergone a wholesome revolution due to the adverse technological advancement. The effectiveness of information technology has as well transformed the environment within which entrepreneurship is conducted. The economy of 90’s majored on microeconomics, while in the current economic world; governments considered the approach of entrepreneurship. Entrepreneurial role has therefore emerged the central issue featured in the current global economy. The level of the entrepreneurial effectiveness has greatly been transformed by use of Information Technology within the economy. The featured effectiveness is introduced through innovation, which directly or indirectly affects the global economy positively. The economic practices of the 90’s have significantly improved, reflected in phenomena like globalization. This research paper has covered various areas of interest, which can help us understand more regarding the current entrepreneurship. The paper looks into the entrepreneurial role in the economy, and especially using the current entrepreneurial skills like internet use, which has turned the whole world a global village. Subsequently, this research paper contains some of the impacts of Information Technology on entrepreneurship. The other area covered by this research is the impacts of innovation on entrepreneurship. Entrepreneurial Role in the Economy Initially, economists constrained entrepreneurial role to microeconomic context only. Additionally, according to microeconomic view, the entrepreneur has a role of determining a profitable function of production, as he assumes the risk which associates the realization of a new product and acting as a catalyst for innovations in the place of work. Entrepreneurship has not been fully covered with the current academic programs, as the discipline is usually taught as an integrated unit and not as an independent program like a degree. Academic programs have been instituted, which equips scholars just with the management knowledge, who eventually assume daily operations in business corporations. An entrepreneur is an initiator, while entrepreneurship accommodates any private or public organization, or individual, with the potential to respond to ever changing demands, utilizes new technologies and produces additional value from the assets at disposal, also entailing the need to motivate the continual phenomena of natural entrepreneurship. Entrepreneurs seek to utilize their ideas by introducing new means of meeting demands, or changing existing means of commodity delivery in order to add value. Primarily, an entrepreneur carries out varying activities including adopting innovative means of addressing socially related problems; seeking to challenge traditional manner of working; incorporating ideas, people, and resources so as to integrate change; spotting business opportunities and optimizing on resources which are under utilised and taking uncertainties and risks; as well as responding to an issue with clarity over the outcome right in mind. Entrepreneurship involves people who have new ideas, consistently accompanied by a purposeful search of resources and assets. Entrepreneurs engage in discovery as well as they exploit opportunities with an aim of creating value through meeting the needs which were previously unmet; they also strive for better ways of delivering current commodities (products and services). In order for entrepreneurship to be successful, effort tem is thus required. This may start with a leader who is a dynamic individual, and wants to institute change in the current business processes. In entrepreneurship, skills and commitment are thus required to see such changes instituted. The scope of entrepreneurship therefore covers the goals set - which run the organization, as well as the entrepreneurial approach of achieving such goals. In economic development, the role of entrepreneurship entails more than just accumulating per capital income and output; it entails initiation and constitution of change in the business structure, the economy as well as society. The referred change is followed by growth of premise and increased income, which permits more wealth to be shared amongst various participants. Additionally, entrepreneurship has been acknowledged as a major tool to help bridge the gap between science and the business market although entrepreneurs faced challenges of lack of managerial skills necessary for running their businesses. Although entrepreneurs face a lot of difficulties, entrepreneurship holds the most effective means of commercializing innovations, forming new enterprises, as well as introducing new commodities to the market. Such entrepreneurial functions have a significant impact on the economy in economic building and provision of jobs. There is an added significance realized through entrepreneurship in the current global economy – in twenty-first century. A challenge of constant advancement in Information Technology is evident in the new global market. Entrepreneurs in private sectors have emerged significant engine of economic growth while the public sector has deteriorated in significance. Entrepreneurs should portray personal features to incorporate the interactive components of the new economy. Public (government) entrepreneurs engage in social matters (social entrepreneurs), not for profit and in civic affairs. The entrepreneurial environment integrates: quality of life, tax structures and regulations of businesses, opportunities for capital access, networking, strong business services, and supportive culture. Impact of Information Technology on Entrepreneurship There is more dynamic, complex, as well as widely spread economy defined by global markets, I.T, and current communication networks. Internet application (internetization) facilitates innovation in the current global economy. Internet application has eased idea marketing (buying and selling of commodities), by the introduction of e-commerce. Ideally, innovation is one of the key drivers of change in any economy as well as in the market structure. The revolution of information as well as the new technological emergence has led to the realization of a more vibrant and dynamic national economic sector known as “the knowledge based industries”. Knowledge based businesses lead to the formation of a cluster of creative and highly innovative companies which realize technologically advanced software and hardware and who, almost exclusively depend on a highly educated and trained workforce. Amongst the advanced countries with the economic history recording a transformation to industrial and manufacturing from an economic status characterized as resource based, currently get themselves running on a newly transformed threshold attaining knowledge based economies of the current (twenty-first century). The concept of the knowledge-based economy causes a clearer recognition regarding the role played by technology and knowledge in economic growth. Even if knowledge has been a constant central element in economic development, more emphasis has been made on the function of knowledge. The recognition of the application of knowledge has applied over the fact that economic growth and development has a strong dependence on the phases of production and distribution. The realization of the knowledge based economy directly emerges as the consequence of newly come globalization phase, and advancements in scientific information as well as communications technology. Additionally, the impact of globalization is witnessed toward the international enlargement of trade as well as capital flows and freed investment. Globalization consequently resulted to an enhanced foreign investment, multinational enterprises’ growth, the global markets integration - for commodities (goods and services), the consolidation via acquisition as well as emergent of powerful corporations and greatly coordinated international financial markets. Moreover, globalization has contributed to the radical pace of technological advancement. Ideally, the internationalization of development and research has promoted the rate of technological diffusion as well as spillovers from one national border to the other. Global competition has instilled a premium upon the successful and quick absorption of the newly technologies with an intention of minimizing costs of production and enhance productivity. The unique feature of the transformation of technology is the creation, not just in the production of new products, but even more significantly creation of new processes. At the core sector of the application of Information Technology involving the concept of knowledge is portrayed in the widespread computers and robotics application. The outstanding benefit obtained through this transformation is the extraordinary research scale as well as development in the efforts of adopting new knowledge applications. The other field that has impacted entrepreneurship, or simply business is Electronic Commerce (EC) refers to the process of buying and selling of commodities (goods and services), where all or some of the transactions happen on the internet. There are three Major types of e-commerce: Business-to-Business (B2B), Business- to- Consumer (B2C), Consumer-to-Consumer (C2C), and Business-to-Government (B2G). Typically, B2B creates an automated forum of conducting business processes, integrating two core components: E-Frastructure and E-markets. E-Frastructure enables logistics involving transportation, warehousing and distribution of products. E-Frastructure also facilitates functions outsourcing, content management software and web-based commerce enablers. E-markets are also featured in B2B, where customers and sellers of various products converge and interact as they conduct business transactions. B2C represent the business environment where online business is conducted between customers and companies. In this forum, customers obtain significant information regarding an organization, they purchase goods (physical or information goods), and receive the selected products over the internet (electronic network). C2C is the typical business conducted between individual customers. Customer-to-Customer is characterized by growth and advancement of electronic marketplaces as well as online auctions. E-bay forms a relevant example of a Customer-to-Customer business forum. B2G is conducted between firms and the public sector. The internet is used as the electronic network, to facilitate public procurement (e-procurement), filling of tax forms, licensing, amongst other government processes. E-commerce can be put into six divisions: i. E-tailing (“virtual store front”) on Webs with online catalogs, at times accumulated into a “virtual mall.” ii. Gathering and utilization of demographic data via Web contacts. iii. EDI (Electronic Data Interchange), used with B2B (Business-to-Business data interchange). iv. Email and fax as well as their respective uses as media which help in reaching established and prospect consumers (for example, with the use of newsletters). v. Business-to-Business (B2B) buying and selling of goods and services. vi. The required security of business related transactions. Some businesses support distant classes facilitating their worker attend their full-time jobs during the day and part time in order to pursue MBA degree during the night hours or in the early morning hours. Entrepreneurship degree can be delivered at the convenience of times and locations. This process is facilitated by use of the interactive technologies. An example was displayed by Ball State University which has employed an innovative approach in order to deliver the degree to those who seek to advance or want to learn the degree within the contemporary environment of business. Use of Information Technology calls for effective laws and policies governing the whole process of electronically supported business transactions. Issues of malicious transactions are prevalent, and can greatly paralyze business transactions, if the field of application is governed by loose laws. Innovatively generated products, including the intangible products of Information Technology ought to be a guard, to avoid misuse of a legal product like trademark, for wrongful purposes. This is mainly indentified in markets with many rivals, and each company wants to have himself reined the market. One way of ensuring that products are properly protected is the use of copyrights and patents. Innovation In order for an economy to thrive, it must acknowledge the effectiveness of innovation. This can be achieved via: esteeming innovation as a key to economic excellence in all sectors, expanding knowledge base, accelerating commercialization and utilization processes of innovation, as well as increasing development and utilization of practices and technologies reflecting eco-efficiency. Entrepreneurs act as catalysts in executing two significant functions of Microeconomy; entrepreneurs contribute to the investment flow and its adoption, and the commercialization of innovation. In economic development, the required type of innovation may have varying levels of uniqueness. A large number of innovations introduced into the economic market are ordinary, characterized by complicated technology or little uniqueness. Expectedly, the economic market has fewer technological innovations as well as breakthrough innovations – notably, actual innovations decrease as the involved technology increases. Despite the uniqueness level or technological complexity, every innovation (specifically the technological and breakthrough innovations) changes into, and grows toward commercialization via one of the following mechanisms: the intrapreneurship, entrepreneurship or the government. Intrapreneurship accommodates entrepreneurial functions within an organization or an existing corporation business, and its environmental features involve the approach of a multidisciplinary teamwork, a business horizon with a longterm, and accommodate organizations operating on the technological frontier. Additionally, intrapreneurship is practiced where there is encouragement of new ideas, failures are allowed, trial and error is not blameable (punishable), the badge of honour is gained through innovation and creativity, there is accessibility and availability of resources, presence of the appropriate system of reward, and there is a readily available support from the top management. The entrepreneurial role, in the advancement of the cycles of technology was paramount. Schumpeter, in the two seminar books: Business Cycles and The Theory of Economic Development explains the role of the technologically influenced entrepreneurship. Entrepreneurs help revolutionalize or reform patterns of production through innovation for realizing a new commodity or reproducing an old product in a whole new way, through opening new sources of material supply or new products outlets, through industrial reorganization and other approaches (Schumpeter). Entrepreneurship calls for individuals who are economic visionaries. Entrepreneurship further involves dynamism and the pursuit of risk, embracing attempts of the current approaches of conducting business, implementing new ideas or current methods of production, introduction of new products, processes and the current forms of business structures. The value of entrepreneurship is determined by the level of innovation within an economy (Schumpeter). Schumpeter accommodated the concept that innovation brings about a significant change in the function of production. The entrepreneur thus catalyzes the effectiveness of innovation – an entrepreneur acts as the engine causing growth and a significant contributor to the economy (wealth) of nations. A model developed by Schumpeter shows that adoption of innovative technology into entrepreneurship facilitates the cost-effectiveness of existing products of the firm, positioning the very firm at a higher competitive advantage compared to rivals in the same industry. The entrepreneur who adopts technological innovation realizes abnormal profit since he sells his products at the price reflecting the higher-cost-structural firm of the old in the same industry. However, the abnormal profit margin disappears gradually as competitors embrace technological advancements. Conclusion Entrepreneurial skills, when optimally utilised steers the economy ahead since entrepreneurship as well as the innovation act as the engine to drive the economy. The role of entrepreneur is to generate ideas, implement them, implement it thus producing new products, or improving the manner in which a given old product or service is delivered. Economies which have integrated information technology and innovation generate better economic outcomes. The role of Information Technology has addressed the problem of barriers of distance and geography, turning the whole world into a global village. I.T, through e-commerce, has helped create a common market, where many sellers and buyers can gather and conduct business. I.T has thus impacted the way entrepreneurship is conducted currently. Every entrepreneur has to update himself with the necessary skills, to enable him take attain a competitive advantage in the marketplace. Advancement in the usage of I.T calls for sound laws to govern the sector integrating use of I.T. strict and effective laws and policies will standardize the kind of transactions conducted over the internet, as well as they protect both the buyer and the seller conducted online business transactions. References Donald, F., Kuratko & Harold, P., Welsch. Strategic Entrepreneaurial Growth. (2004). 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