Development of Entrepreneurship

Evolution of Entrepreneurship

The definition of entrepreneurship can be traced back to Marco Polo, who went to the Middle East for business. Marco Polo entered into agreements with investors to sell his goods. The contract trader borrowed at a rate of 22.5 percent, as well as insurance.

Traders are actively involved in trading in the face of all physical and emotional risks, while investors are passive risk bearers. When the merchant adventurer successfully sells the products and completes the journey, the profit is divided, the capitalist majority (up to 75%) and the merchant adventurer collects the remaining 25%.

In the Middle Ages, an entrepreneur was considered to be a person who was responsible for the management and control of large-scale industrial operations. Using the government’s resources, it is possible to maintain control over the project. The entrepreneur is not in danger in this situation. In this day and age, entrepreneurs have influence and authority over construction projects such as public buildings and churches.

Entrepreneurship development in the 17th century is associated with risk and the relationship between founders. The person who signed a contract arrangement with the government to perform a service or supply products that have been determined is known as an entrepreneur. The contract price is set in stone. The entrepreneurs are then solely liable for the company’s profits and losses. A Frenchman named John Law was one of the entrepreneurs of the time.

The Mississippi Company, which had an exclusive franchise to trade between France and the New World, was founded by the founder of the Royal Bank of France. The company’s monopoly on French trade eventually led to its demise. Entrepreneurs are defined by Economist Richard Cantillion. Risk insurers, in his opinion, are the entrepreneurs. Merchants, farmers, craftspeople, and entrepreneurs are all examples of entrepreneurs. They buy products at a set price and sell them at an unknown price, all while taking risks.

The individual with capital was distinguished from the one who needed capital in the 18th century. The capital provider was distinguished from the entrepreneur. One explanation for this distinction was the globalization that was taking place at the time. Eli Whitney was a famous American inventor who created the cotton gin.

One of the most important inventions of the Industrial Revolution was the steam engine. Thomas Edison was a prolific inventor who came up with a slew of new ideas. He was working on new technologies but could not afford to fund them himself. Edison was a capital user or an entrepreneur, not a venture capitalist or a provider of cash.

Entrepreneurs were not necessarily connected with management in the 19th and 20th centuries. An entrepreneur is someone who organizes, manages, and assumes the risk of a business or enterprise, according to Merriam-online Webster’s definition. For personal benefit, the entrepreneur organizes and manages a business. The materials used in the business, as well as the cost of the land, the services he hires, and the capital he needs. One of the best instances of this definition is Andrew Carnegie. Carnegie, a destitute Scottish immigrant, transformed the American Steel Industry into one of the world’s industrial marvels.

Entrepreneurs’ role in the mid-twentieth century was to introduce an invention that would recreate or revolutionize the industrial pattern. One of the most difficult tasks for an entrepreneur is innovation or the act of presenting new ideas. For instance, Edward Harriman reorganized the railroad in the United States, while John Morgan built his big banking firm by reorganizing and financing the country’s businesses. Aside from laser beams, supersonic planes, and space stations, the Egyptians constructed and built gigantic pyramids out of stone blocks weighing many tonnes each.

Entrepreneurs are regarded as heroes of the free market in the twenty-first century. The century’s entrepreneur established a wide range of products and services and is willing to take numerous risks in the business. In 2005, Hisrich, Peter, and Shepherd defined an entrepreneur as a person who organizes, purchases raw materials, sets up infrastructure, adds his creativity and experience, and plans and manages a business.

With the advancement of technology, the future of entrepreneurship will be growth. Modern technologies and the Internet have improved business practices. Entrepreneurs may now put their business ideas into action with a single click of a button.

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Factors Influencing Entrepreneurship

An individual cannot go straightway and start an enterprise. There are a lot of factors that have to be considered by entrepreneurs. Some of these factors are explained as follows:

Economic Factors

Economic variables can have a significant impact on the growth of future entrepreneurs. Those who have been reared in more difficult circumstances, with limited access to finance and fewer prospects for financial success, may be compelled to pursue entrepreneurship to find a more comfortable living and create opportunities.

This has been the case with entrepreneurs such as Daymond John, who has spoken about how his financial difficulties as a child led him to become the hustling and hard-working successful entrepreneur he is today.

Capital

Because capital is often required for research and development, production or manufacturing, and marketing, access to capital is one aspect that can facilitate and expedite entrepreneurship. This is why venture capitalists, angel investors, entrepreneurial incubators, and accelerators exist to connect prospective entrepreneurs with supportive investors who have the necessary capital and believe in the concepts they are backing.

Even without venture capital backing, it’s gotten a lot easier to establish and build a firm because of crowdsourcing, equity crowdfunding, and technological advancements over the last decade. There are economical and efficient ways to develop a wide range of products, lowering the barriers to entry into entrepreneurship and allowing many more people to pursue this path. You can even start pursuing your dreams while still in high school these days.

Labour

Another aspect that influences entrepreneurship is the availability and affordability of good labor, as it might be difficult to recruit suitable individuals to work for a new firm. However, thanks to sites such as UpWorks and Fiverr, this is another element that is considerably less troublesome these days, much like access to finance.

These freelancer marketplaces make it easy to connect with the most talented and qualified potential employees around the world are fast and inexpensive and you can find the effort required to complete your idea wherever you are.

Market

The market is the one factor that applies as much now as it did decades ago. If you want to sell your idea, service, or product and make any money, you need to locate the right target market for it. While a market for a concept still needs to exist for it to succeed and profit, locating and accessing that market has been easier in recent years. Finding and reaching a specific demographic has never been easier or more affordable, thanks to social media, digital magazines, and online groups and forums. While a large enough target market interested in your idea is required to ensure profitability, if that market exists, reaching them should be considerably easier now than it was ten years ago.

Social Factors

Social factors can have a considerable impact on a person’s likelihood of pursuing or succeeding in entrepreneurship, but they are not certain to guide a person in one direction or the other. Nonetheless, societal variables such as a family history of entrepreneurship or family support to pursue an entrepreneurial path can play a significant role in directing people toward an entrepreneurial future.

Family Background

One of the best and most straightforward methods to immerse a youngster in the entrepreneurial attitude and to show the benefits of starting and running one’s firm is to have a family experience in entrepreneurship. Those who have had a great experience with their family firm may be more willing to seek their endeavors in the future and they may view the entrepreneurial path as more traditional and less dangerous. However, having an entrepreneurial family background is not the only way to encourage people to start their own business, education and encouragement are other viable options.

Education

Education can influence whether a student chooses to pursue an entrepreneurial or more standard corporate career route. Unfortunately, for many decades, the formal education system of different countries has prepared students to prepare for specific jobs, resulting in a generation of corporate employees rather than entrepreneurs. However, in the last decade, this has also altered dramatically.

As entrepreneurship has grown in popularity, it has also become a more prominent topic of study at business schools and colleges. Entrepreneurship courses are now available at many universities.

Cultural Value

Cultural perspectives and values placed on entrepreneurship have an impact on the predominance of an entrepreneurial mindset among young people. The good news is that, especially in the last two decades, our society has come to value and encourage entrepreneurship. There has been a great rise in entrepreneurship over the past two decades, and we have seen the financial reward for those involved, from the “dot com boom” to shows such as Shark Tank and the rise of unicorn start-ups.

This rise in entrepreneurship’s popularity has resulted in a greater focus on the subject at colleges, as well as a greater acceptance, acclaim, and reverence in our culture. As a result, our culture places a high emphasis on entrepreneurship, which is a terrific motivator for young children and teenagers to become future entrepreneurs.

Psychological Factors

Perhaps the most direct influences on a person’s likelihood of becoming an entrepreneur, or at least a successful one, are psychological and may be natural or instinctive in some people. While a person’s upbringing can influence psychological qualities such as creativity, risk tolerance, desire, and leadership, these personality traits can also be firmly rooted in who a person is, regardless of external factors.

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Relationship Between Innovation And Entrepreneurship

It’s important to find and connect a link between entrepreneurship and innovation. Both are important factors in a country’s economic development. Entrepreneurship relates to the economic process and its outcomes, such as the formation of new businesses.

On the other hand, innovation has deep roots in creativity, leading to patents, R&D, and the establishment of technology-intensive enterprises, which are the center of much economic activity. This link exists on a personal level, i.e., entrepreneur, and a corporate level, i.e., intrapreneur, and is focused on combining efforts with the deployment of the most effective resources and capabilities to capture value. What are we going to get?

Ideas, whether in the form of products, services, or processes, all of which are innovative in their setting. They can be incremental or even radical, which is what we call disruptive.

Innovation becomes the catalyst for new strategic growth and opens up new commercial opportunities. Because markets have become extremely competitive, the creation of economic value can only be sustained as enterprises, large and small, young and old, enhance their capacity to generate new marketable ideas and quickly commercialize them.

They must adjust their competitive contribution in response to changing market conditions. This entrepreneurial spirit, whether manifested in the formation of new businesses or the expansion of existing ones, keeps industries humming and keeps areas healthy and prosperous.

Those who put a lot of money into invention have realized that entrepreneurship is the most effective way to turn ideas into reality. As a result, it is critical to promote the nation’s progress through encouraging innovation and entrepreneurship on a single platform. Firms that were early adopters are still in business by relocating to a more welcoming atmosphere.

What matters is to concentrate efforts on sustaining the spirit and capacity to innovate continuously in these tumultuous circumstances. This may be a preliminary step in the entrepreneurial process, but it could serve as a turning point in the creation of further riches. The next step is commercialization.

If entrepreneurship is carried out in isolation from innovation, it may limit any significant economic benefit. We must nurture the entrepreneurial spirit that leads to the contribution of innovations. They encourage economic growth, whether locally or regionally, when they work together. As a result, entrepreneurs are focused on actually capturing value through a customer’s enjoyment. They become growth engines and are critical to the region’s competitiveness.

Entrepreneurship has a critical role in innovation-driven economies. The higher the rate of invention, the higher the rate of entrepreneurial births for new technology absorption and spread. There is a clear correlation between entrepreneurship and invention.

The following are a few questions to consider when determining the rate of innovation and entrepreneurial economies, whether they be local, regional, national, or global:

• What is the degree of entrepreneurial variation between the compared regions?
  
  
• Do they have a significant impact on regional growth?
  
  
• How do we see the regional differences in entrepreneurship activity?
  
  
• What are the most likely economic activity drivers?
  
  
• What elements influence the innovation process?

The emergence of new businesses varies by area. The more the inclination for entrepreneurship, the greater the possibility for the region to become more economically sound. The government’s action is unavoidable. Individuals and clusters act as torch-bearers at the same time.

As economies advance, hence do their level of innovation, and hence their economic progress. They succeed in creating tech-nology-intensive businesses that generate long-term profits and economic value. This combination is stealthy and is responsible for the incumbent region’s continued economic expansion and progress, concealing it as a competitive advantage.

As a result, it is clear that entrepreneurship is a major engine of economic growth, and that innovation aids in volatile times. They are strongly linked, and we can see that regions that encourage entrepreneurship succeed economically. Innovation has historically been a driver of economic growth, and with recent uncertainties such as the COVID-19 pandemic, it has risen to the forefront of all activities. As a result, we must create an environment conducive to innovation and capitalize on it to benefit in the long run.

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Social Environment in Entrepreneurial Development

Entrepreneurial behavior is significantly influenced by the social environment, which contributes to entrepreneurial growth. People’s values, attitudes, beliefs, conventions, religion, and habits make up their social environment. Traditional and orthodox social environments stifle entrepreneurship development, but prosperous and developing social environments encourage it.

In a nutshell, the impact of the social environment on the growth of entrepreneurship can be summarised as follows:

Customs and Religious Traditions

Entrepreneurial growth is also influenced by customs, religious faith, and ideology. There are religious traditions in a developing country such as India that are not conducive to entrepreneurship. People are fatalists who dislike working hard or trying something new.

Family Background

The family environment has an impact on entrepreneurship. Family resources can be pooled to invest in and build a joint family enterprise. Because of certain inherent advantages, if the father is a professional, entrepreneur, or businessman, the son is more likely to follow in his footsteps. The entrepreneur’s mobility is influenced by the family’s occupational and social position.

Desire for Improvement and Protection of Status

People are compelled to act appropriately by their desire to develop and defend their status. People work hard to maintain and increase their standing, which helps to foster entrepreneurship.

Social Mobility and Social Marginality

Some people believe that a high level of mobility encourages the emergence of entrepreneurship. Entrepreneurship is also influenced by social marginality.

Values

People’s values are enduring ideas about morals, equality, freedom, work ethic, and other topics. When people’s values shift, it has an impact on how businesses, governments, and society operate.

Attitude Towards Changes and Risk-taking

The entrepreneurial environment is also influenced by people’s attitudes toward change, capacity and feelings of risk-taking, among other factors. The development of entrepreneurship is influenced by a positive attitude toward change and taking risks.

Work Ethics

It refers to a person’s commitment to or preoccupation with their work. Entrepreneurial success necessitates a sense of responsibility and hard labor. Because of their dedication to the effort, the Japanese have made remarkable progress.

Educational and Technical Knowhow

Education, entrepreneurship, and development are inextricably linked, if not intertwined. Education is the most effective way of increasing a person’s resourcefulness, which includes several aspects of entrepreneurship.