The contribution of entrepreneurship to generation of employment is one of most important issues in regional economic development. One popular perception is that entrepreneurship can create jobs, and it could be justified to support startups, especially during economic recessions. Despite of the perception, empirical evidence shows an inconclusive role of entrepreneurship in job creation.
It can be inferred that entry of entrepreneurs can create jobs, while the exit of firms diminish a number of jobs. It means that entrepreneurs immediately make more jobs when they initiate businesses, but they also destroy jobs by increasing the level of competition which can lead to shrink or exit of incumbents (Parker, 2009). Thus, the entire number of job is dependent on the ‘net employment growth rate’ that can be calculated by subtracting the job destruction rate from the job creation rate (van Praag & Versloot, 2007). However, it is not easily capture by a simple method, because of the fact that the dynamics of generating employment is highly complex, and requires a consideration of various conditions, including firm size, age, industry business cycle, and entry and exit rate.
An early stream of research about the effects of entrepreneurship on job creation is focusing on the short period results (Fritsch, 1997; Audretsch & Fritsch, 1996). For instance, Fritsch (1997) finds that there is significantly negative relationship between entry and regional employment change for the year of t+1 and t+2 in Germany. He explains the reason of negative relationship with that the positive impact of new firms has been overcompensated for by unexplained factors. In the conclusion part, entrepreneurship is less effective way for regional employment, at le...
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...ew businesses can create jobs as direct and immediate effects, whereas new entry can also lead to job losses by destroying incumbents through competitions in markets. When it takes account as a whole, the effect of entrepreneurship on employment should be carefully discussed in a long term for indirect effects.
Even though the previous findings have attempted to figure out the relationship between entrepreneurship and employment, it is necessary to consider the quality of employment and job satisfactions of employees. Arguably, the statistical data about employment is used for boosting for supporting small businesses and entrepreneurship, but the qualities of jobs provided by small firms fails to draw attention. Because of the fact that employees’ job satisfaction can also affect the success of entrepreneurship, more studies about the issues should be conducted.
Policy makers wield huge influence when it comes to intervention in new firm creation and growth. Policy makers often put into place macro economic policies that seek to overcome attitudinal, resource, operational and strategic barriers to the formation of new firms. (Storey 1994) New firms represent a large portion of the new jobs created each year and therefore politicians are incentivized to make sure new firms are formed. In the past 17 years 63 percent of new jobs have come from small businesses in the United States. (SBA Office of Advocacy 2009) New firms are often closed within 5 years with only a third surviv...
Many things have changed from the 1950s, including entrepreneurship. Technology has made the option of becoming an entrepreneur accessible to almost anyone. However, we are beginning to see a decline in entrepreneurs in the United States, this is due to large companies who seem to be spreading all over the United States and into other countries like a wildfire. The big start to entrepreneurs becoming popular was after World War two when Americans were no longer worrying about the future and instead could see something better. That is why entrepreneurship took off in the 1950’s, it had progressed for many years creating new jobs and opportunities but recently we have come to a drop in opportunities for people seeking to be entrepreneurs.
Entrepreneurship keeps the US economy flourishing, creating
However, this move is not always a wise one because when an enterprise has fewer workers it would reduce its productivity which would mean more financial problems. Besides it strains the workforce. If these corporations continue incurring losses they eventually close down and as a result, the workforce loses jobs. This is what has been going on since December 2007. Unemployment is one of the biggest problems that governments have to deal with. (compston 2002).
“There is no one definitive profile of an entrepreneur. Successful entrepreneurs come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certain personal attributes, including: creativity, dedication, determination, flexibility, leadership, passion, self-confidence, and smarts." (Principles of Entrepreneurship)
Regarding to self-selection, because of the volatile wages in small firms, risk-averse employees prefer to work in large firms where they may sacrifice flexibility and autonomy (Benz and Frey, 2008). It means that risk-averse employees who want to become entrepreneurs will stay in the same occupation, adversely the risk- loving ones will want to change the occupation sector in case of entrepreneurship entry. If these predictions are right, it leads to the opposite result to Hypothesis 3.
"Entrepreneurs who start and build new businesses are more celebrated than studied. They embody, in the popular imagination and in the eyes of some scholars, the virtues of "boldness, ingenuity, leadership, persistence and determination." Policymakers see them as a crucial source of employment and productivity growth. Yet our systematic knowledge of how entrepreneurs start and grow their businesses is limited. The activity does not occupy a prominent place in the study of business and economics.
Within every major economy, a great factor in providing the energy of the core of the nations economy is the small and medium enterprises. These cluster of firms are what provide new economic activity, new innovative products and services, along with growing employment and in general a crucial system in ensuring the economy is at a stable growth level. With a majority of this activity stemming from family controlled or managed businesses, the focus on developing a global and long term perspective for these firms are ever growing in importance because of the global perspective entrepreneurship has started to take.
Entrepreneurship - a special kind of activity. Its constant conditions are limited resources, competition and uncertainty of the situation. The main tools of the entrepreneur are: thrift, cooperation and innovation. Consequently, enterprise is the independent economic entity, with rights of a legal entity, which is based on the use of labor collective property produces and sells products, works, and provides services.
Nowadays, entrepreneurship becomes most popular career, where our government encourages our graduated student to involve in business so that unemployment will not happen in our country. Policymakers, academics, and researcher agree that entrepreneurship is a vital route to economic advancement for both developed and developing economics (Zelealem et al., 2004). Entrepreneurship has many types for example small business and others. Today small business, particularly the new ones, is the main vehicle for entrepreneurship, contributing not just to employment, social and political stability, but also to innovation and competitive power (Thurik & Wennekers, 2004).
The success of a business is greatly dependent on its entrepreneur. An entrepreneur is someone who takes the financial risk of starting and managing a new business venture. In order to be a successful entrepreneur, one must be ready to take a risk and invest one’s own savings into a business. The job requires that the individual be ambitious and committed to working hard in order to achieve the set targets. A successful entrepreneur is able to multi-task and communicates effectively with people, possessing leadership qualities such as confidence and motivation. The individual must play the role of constant motivator and inspire employees to improve their work performance, whilst ensuring a comfortable environment for the employees to work in. According to Schumpeter (1982), an entrepreneur is more of a ‘heroic’ than an ‘economic’ figure; his motivation should not solely be monetary, rather stemming more from inspiration and ambition.
Many people dream of becoming entrepreneurs someday. But it made me realize that there other factors that needs to be taken into consideration. We need to ask ourselves are we ready to take the challenge to the outside world. Not everyone have the vision, innovation and creativity to become an entrepreneur. The individual must have a positive attitude and accept the responsibility, have discipline to meet their goals, and take action when the opportunity presents itself. Many prefer a job security and rely on a weekly paycheck, while entrepreneurs will take risks and doesn 't have that luxury to know the amount of their income.
Entrepreneurs create new businesses, and new businesses in turn create jobs, strengthening competition, and may even increase productivity through technological change. Increases in levels of entrepreneurship will result to an increase in economic growth (Nolan, 2003).Entrepreneurs by starting or setting up their businesses, will help with local development by locating less developed areas. The growth of industries and businesses in these areas leads to infrastructure improvements, such as better roads and stable electricity. Every business that is located in a less developed area will create opportunities that will improve the living conditions of people residing in that particular area (Nolan, 2003).
Being an entrepreneur, is advanced citizenship, you have to want it real bad. Entrepreneur is not entitlement. Being an entrepreneur is a life commitment. Like in the movie Wall Street, a famous line was "You can 't be a little bit pregnant." The fact is you can 't be an on again, off again entrepreneur.
Over the summer I had the opportunity to intern with Community Empowerment Solutions where I provided pro-bono consulting services to entrepreneurs in Ecuador. Through this experience, I solidified my interest in business and entrepreneurship. I am interested in interning with Facebook’s business programs because I am passionate about creating change in the world by connecting it and want to pursue my interest in business. A Facebook University for Global Marketing Solutions internship would provide me the opportunity to follow my interest in business by applying the problem solving and team-focused skills that I have acquired, and also allow me to continue learning about business solutions that would further my ability to create change at Facebook and once I leave Facebook.