Entrepreneurship and Venture Creation - Essay Example

They seek to provide high quality goods at low costs through innovation. This factor together with wealth creation led to economic growth. Entrepreneurs seek to invest money in small and medium market enterprises. This leads the niche market to flourish and strengthen the economy. This is why a society only receives consideration of prosperity as to the degree to which it encourages and rewards entrepreneurship (Stel 2005 pg 18). In many liberal economies, entrepreneurship pursuit receives high priority as opposed to its consequences.

However, careful evaluation reveals that this behavior creates a credit crunch that leads to financial turmoil. The economic and social impacts of entrepreneurial activity with no regulation lead to short-term benefits (Acz, 2010 PG 78). Yet, in the end national markets, economies, individual and firms suffer severely resulting into huge value destruction. This essay seeks to analyze the theory of entrepreneurship and its relation to the UK economy coming from recession. It will discuss different types of entrepreneurial activities.

It indicates how each activity affects economic performance. Entrepreneurship before the recession was unregulated. This led to issues arising in the capitalist economies leading due to short-term profits and speculation bubbles. The entrepreneurs experienced adverse effects of economic factors beyond their control. These include limitation of amount of credit available, decrease in demand and reductions in confidence levels. This resulted in business closures, loss of employment and economic stagnation.

The capitalist economy present at the time though highly adaptive and robust held a crisis between its relationships to the society (Stel, 2005 pg 124). The freedom it gave to an enterprise to engage in wealth creation and maximization was in contrast to the society expectation of responsibility. The old entrepreneurial theory receives its basis from the capitalist theory of growth.