Importance of Entrepreneurship in the US Economy
Details:1. What are the major reasons for entrepreneurship becoming so important in our economy? 2. Why is there no easy way to define entrepreneur? 3. What role does past experience play in business start-ups? 4. Why is buying a business a less risky proposition than starting one? 5. Why has franchising become so popular in recent years? 6. What factors do Korean Americans cite as contributing to their entrepreneurial success? 7. Why do some communities prevent home-based businesses? 8. how does the entrepreneur’s role change as a company grows?
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- Importance of entrepreneurship in the U.S economy
Entrepreneurship has a quit a number of benefits to the economy of nation, these include the following 5
- Providing employment- people who do not get employment anywhere often opt to start up their own businesses. It is estimated that over 34 million of new employment opportunities since 1980 were created through entrepreneurship.
- Stimulates research and innovation- inventions result as entrepreneurs search for the best ways of multiplying money.
- Promotes self sufficiency – entrepreneurs are self sufficient because the products of their businesses include liberty, happiness, monetary rewards, and contentment after working.
- Contribution to the wealth of a nation – the entrepreneurship comes with exchange of goods and services that may be taxed to add up to a nation’s GDP. Ideas, inventions, and thoughts are also a great resource to a nation.
- Self satisfaction- entrepreneurship provides self satisfaction to entrepreneurs due to the associated rewards
- Why there is no easy way of defining entrepreneurship
The ambiguity in defining entrepreneurship may be partly attributed to differentiated traditions in the field of entrepreneurship research, particularly anthropology, social science, economics, and management. Further ambiguity may be due to the proliferation of sub-categories in the entrepreneurial research; these sub-categories include corporate entrepreneurship, intrepreneuring, venturing, and internal entrepreneurship (Nadim & Richard, 2006, pg. 87).
- The role that past experience plays in business star-ups
Entrepreneurial literature suggests that entrepreneur with prior experience into eh given industry have an upper hand in successfully starting a business due to the experience and social connections, compared to novice entrepreneurs. This experience may help them in raising venture capital (Hess, 2011, pg. 105).
- Why is buying a business less risky proposition than starting one?
buying a business is purported a less risky proposition than starting one since established businesses are less likely to failure, owing to the fact that business buyers may not have owned a business before. By buying a business is not associated with the turmoil of starting up one (Schenck, 2009, pg. 12).
- Why has franchising become so popular in recent years?
The growing popularity of franchising may be attributed to a number of reasons. According to Beshel, franchising may gather much popularity due to the following reasons.
- Owning a franchise allows one to go to business for their benefits, but not by themselves.
- A franchise equips franchisees with independence in operating a business.
- A franchise is associated with products or services which may already have attained extensive brand-name recognition. Therefore, entrepreneurs are finding it a better avenue of enjoying a pre-sold customer base. Otherwise, this may take years to establish.
- A franchise increases the chances for business success due to the fact that it involves products and methods that are already proven.
- Franchise prevails with significant pre-opening support such as; design and construction, site selection, financing, training, and grand opening program.
- Franchise is also associated with significant ongoing support such as national and regional advertising, training, operative procedures, increased spending power and access to bulk purchasing, and ongoing supervision and management (2010, pg. 10).
- What factors do Korean Americans cite as contributing to their entrepreneurial success?
The entrepreneurial success experienced with Korean Americans may be associated with a number of factors; on of the factors is education. Literature holds that most of the Korean immigrants are learned people possessing diverse skills, due to the language barrier that bedevils them in the US, and they are left with limited opportunity for a formal job. This forces them into entrepreneurship. The second reason may e the fact that Koreans are known for citing opportunities where others see none; they possess unwavering perseverance even in adversity. The third attribute is the fact that Korean Americans are devoted to their families which serves as “social capital”, they work hard to secure their children a better place in the US schools due to ferocious competition in Korea. The other success factor is the issue of Koreans willing to work for low wages, for long hours, and use of family labor. Another important point to note is the fact that Koreans tailor their ventures to local demands.
- Why do communities prevent home based businesses?
The community may not approve home-based businesses due to an array of factors such as tax evasion, health hazards, and environmental hazards posed by the businesses. It is deemed that home based businesses lead to tax evasion, which may lead to a lower GDP. Ergonomic experts posit that home-based businesses may lead to lifestyle diseases such as heart disease and obesity due to immobility. Home based businesses also release waste materials that may harm the surrounding community (Jeffery & Linsenbach, pg. 137).
- How does the entrepreneur’s role change as the company grows?
As the business pick growth, an entrepreneur must change significantly, Hess describes growth as evolution, change, and learning; he posits that as the business grows, entrepreneurs must change not only in what they do but also in how they interact with employees and outside entities (2011, pg. 100). An entrepreneur should be able to adapt to the new needs imposed by the business. Growth necessitates an entrepreneur to change the way of doing things, it calls for new skills. Growth requires an entrepreneur to change his or her scope of things. This change may be summarized in three dimensions as;
- The advancement from hands-on way of doing things to a manager, a leader, and ultimately a mentor.
- Movement from a functional specialist, to a general manager, back to a functional specialist, and ultimately to a strategy and a conductor of organizational culture.
- Movement from believe in primacy, one advances to believing in others, he further changes to a believer of the importance of working towards a bigger goal other than just financial rewards of the business.
Schenck, B. F. (2009). Selling your business for dummies. Hoboken, N.J: Wiley.
Hess, E. D. (2011). Growing an entrepreneurial business: Concepts and cases. Stanford, California: Stanford Business Books.
Nadim, A & Richard, G. S. (2006). Definitions Supporting Frameworks for Data Collection: Defining Entrepreneurial Activity. Entrepreneurship Theory & Practice, 25(4): 81- 99.
Beshel, B. (2010). An Introduction to Entrepreneurship. IFA Educational Foundation. 15(4): 12- 45.
MacDonald, H. (2005). WHY Koreans Succeed. City Journal. Retrieved 13 March 2013. Web: http://www.city-journal.org/html/5_2_a2.html
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