Impact of Entrepreneurial Activities and Innovation on Economy | 2018-09-12 | daily-sun.com

Impact of Entrepreneurial Activities and Innovation on Economy

Muhammad Mahboob Ali     12 September, 2018 12:00 AM printer

An entrepreneur is a personality who has control over an innovative enterprise, venture or idea and is accountable for the inherent risks and the outcome is establishment of a company with a service record. These companies, normally not long created, are in a phase of expansion and explore opportunities for markets starting from grassroots level to domestically, regionally and globally. Today “entrepreneurship” is a buzz word. Entrepreneurship and innovation can lead to economic growth plus change. Informal sector of Bangladesh should be gradually converted to formal sector. To promote entrepreneurship and science-led solutions for sustainable and continuous inclusive growth in Bangladesh requires arranging. More and more people are using entrepreneurial skills in building sustainable enterprises for profit and non-profit to effect will lead to change in Bangladesh. Social business is not a new phenomenon as it prevails in this subcontinent for long 1,000 years back. However, Bangladesh needs to progressively shift away from dependence on primary source of production and commodity-based industries to open up to international trade and to building capacity in some knowledge-intensive industries. Entrepreneurial mindset must possess for attitude and empathy.

Competitiveness refers to set of factors, policies and institutions that determine the level of efficiency of a country taking into account its level of development: Attitude refers to the individual’s mindset, particularly a risk-taking nature and levels of perseverance, qualities identified as essential among entrepreneurs.; skills refer to the set of job-related and behavioural skills required to successfully found or work in a fast-growing, innovative organisation. Cultural/social framework refers to the set of social and cultural factors that either support or inhibit an individual’s decision to engage in the entrepreneurial ecosystem rather than other occupational pathways.  Regulatory framework refers to the administrative processes and rules required to start and operate a company, including licensing, tax and labour market regulations. Market framework refers to the availability of necessary inputs, transformation processes and customer demand necessary to operate and develop the venture. Network access refers to the availability of supporting partners, advisers and enablers who transfer know-how and create opportunities for growth. Innovation and entrepreneurship offer potential for transformational impact. This transformation would need to be driven by a growth oriented agenda that leverages: Import substitution and Export oriented SMEs with strong growth potentialities; Development oriented start-up companies; Industry-facing research and development capabilities.

During the 18th Century French Economist Richard Cantillon used entrepreneur, who are non-fixed income earners and pay known costs of production but earn uncertain incomes, due to the speculative nature of pandering to an unknown demand for their product. Jean-Baptiste Say pointed out that it was entrepreneurs who sought out inefficient uses of resources and capital and moved them into more productive, higher yield areas. According to Joseph   Schumpeter “carrying out innovations is the only function which is fundamental in history". Peter F. Drucker   wrote that purposeful innovation results from analysis, systemic review and hard work and can be taught, replicated and learned. Innovation is both conceptual and perceptual. Nobel Laureate Theodore W. Schultz argued that although farmers differ for reasons of schooling, health and experience in their ability to perceive, to interpret and to take appropriate action in responding to new information, they provide an essential human resource which is entrepreneurship. Creation of new products and methods destroys the old products and methods. To provide risk, capital to high potential ventures in exchange for partial ownership of the firm, venture capitalists are typically active investors who seek to add value through their inter-action with and advice for the managers of the entrepreneurial venture (Arthurs and Busenitz). Clayton M. Christensen divided new technology into two categories: sustaining and disruptive. Mises and Hayek developed a modern society owes its preservation to private or separate ownership of the means of production and to market-exchange processes. The economic freedom stemming from private ownership and free markets becomes a necessary condition for an overarching political freedom. Cassimet al. (2014) argued that stimulation of entrepreneurship and small business is important as the global competitiveness race and the moves occurring in other parts of the world require hastening towards the development and adoption of policies that encourage innovation and entrepreneurship. Nobel Laureate Amartya Sen argued that the business community plays a unique role but they should not get into making quick money on the sly; they have to think big, not just in terms of money, but also in terms of remedies for the society. Littlewood and Holt (2015) depicted that social entrepreneurship considering a framework of new institutional theories and writing on new venture creation, this research explores the significance of environment for the process of social entrepreneurship, for social enterprises, and for social entrepreneurs.

Strategically leverage refers to traditional sectors and emerging industrial verticals could benefit from a combination of the following initiatives, including: Reintroducing incentives for technology adoption.

 Developing channels for greater access to supply chains and international markets; strengthening the national quality infrastructure; addressing technological skills gaps. Both entrepreneurship and innovation are demanding for creativity. Creativity is a process by which a symbolic domain in the culture can be  changed. Creativity is a function of three components: Expertise; Creative thinking skills; Motivation. Creativity  consists of anticipation and commitment. Entrepreneurs need to take bold creative steps but environment must encourage creativity.

Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology lacks refinement, often has performance problems because it is new, appeals to a limited audience and may not yet have a proven practical application. Cloud computing has been a hugely disruptive technology in the business world; cloud computing is encompassing everything from infrastructure as a service through a software to provide service.

In the middle, there is a platform tier providing the micro services that power the likes of Android and iPhone apps, and also many web-delivered services.

The Entrepreneurship process model steps with: 1) Idea Generation; 2) Conceptualisation; 3) Invention; 4) Implementation; 5) Sales services. Link between innovation and entrepreneurship, the role of institutions for entrepreneurship, and the tendency of national accounts to under-record the social value of innovation and entrepreneurship have been facing challenges to implement. If the measures used do not capture the full social value of innovation, we are likely to underestimate the genuine rate of innovation. A country like Bangladesh suffers from the problem of informal sector where entrepreneurship grows but it is not properly counted.

Factors affecting entrepreneurship includes infrastructure-both physical-social; institutionalisation; financial access; economic factor; education; gender balance; empowerment of people; R&D; ecological balances; participation in global value chain; capacity development, farming and non-farming activities; conducive policies at national social level; technological advancement; future of social mobilisation; volunteer recruitment; attracting professionals to the social enterprise sector; providing legal assistance.

Innovation for ecosystem and the challenges it faces, and it discourses the efforts ought to be arranged by the government towards the promotion of innovation for entrepreneurship development and sustainable growth.

Lifelong learning and innovation in companies entrepreneurial learning does not stop, say, five years after starting a firm. It will continue to develop depending on the initiatives employed by managers and their employees, as well as on the specific situational challenges the firms faces.

Entrepreneurship as a career path for young learners has gained importance and should be given its due share of consideration that it demands. Entrepreneurial companies can contribute to economic welfare as they increase the innovative capacity of the economy.

Cloud computing has been a hugely disruptive technology in the business world;

 Cloud computing is encompassing everything from infrastructure as a service through a software to provide service.

The position of technical innovation; foundations of innovation: creativity and structural creativity; interpreting creativity into innovation; kinds and designs of innovation; values fights and project supremacy; judgment of entry; novelty plans; selecting novelty schemes; teamwork plans; defensive innovation; overview to the fresh merchandise growth procedures are required. Employers will pay higher wages to more educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have any intrinsic value if it can convey information about the employee to the employer and if the signal is costly.

Situation of the Gini coefficient ought to improve so that social justice and equitable distribution can be arranged and removing income inequality can be attained in the country. Empowerment of people may arrange the aforesaid situation to attain. Virtually to have dynamic economic situation along with people’s welfare may be attained through converting collecting savings and channelling it in the investment procedure for which shall deposit can also help and as such a spate regulator is needed before establishing community banking. Multilevel marketing (MLM) companies should not be permitted to work as they are working without any legal status and doing fraud. Systematic procedure and legal status for community banking should be developed which will replace current agent banking system also. To implement sustainable development goal there is no other alternative but to creative alternative banking system in the rural areas so that poor people can not only save but also interested to invest in the local level planning process for which employment can be generated. As such productive investment through social entrepreneurship in the rural areas and changing the structure of the rural economic dynamics is very much important to add value in the domestic and global value chain with efficiency and effectiveness. Social education is also work as an important component to come out from the vicious circle of poverty.

Building linkages between the enterprises and import substitution and export oriented SMEs could be an important way to facilitate integration with global value chains and new markets.

The  significant part of SMEs in an economy consist of: organisation of business chances; small business promotion organisation, buying, industrial and financial supervision; substitute ways to entrepreneurship; backing of chances in the market setting; organisation of development of the insignificant business; legal requirements which small selling must follow   e-business and the entrepreneur; gathering of the business plan with the emphasis on the plan; dissimilar rudiments of the strategy, financial statement  and cash flow statement; broad-based black financial enablement and chances for MSMEs. Pouring services in the “new” low-cost that require commercial free enterprise; connection between entrepreneurship and planned organisation; outline for risk-taking plan; part of free enterprise in a great business and an examination of the changes amid entrepreneurship and intrapreneurship; issues which ease and constrain intrapreneurship; the growth of an outline for application of business free enterprise. Risk-taking leadership; link between company entrepreneurship and concert should work with correlation. For better engagement of entrepreneurship angle investors are required so that people can have the empowerment. To support through creating employment opportunity of unbanked people through arranging financial inclusion. This will also help to attain   sustainable development goals. Social welfare and grand utility will be tangent when equitable distribution can be attained by Bangladeshi entrepreneurs though creativity, social obligations and social business. In each economics and business school of the Bangladesh should establish business incubator for practical learning.

Govt. of Bangladesh should announce a particular day as Entrepreneurial Day and we should take cognizance of that day so that social awareness can be raised. Moreover, entrepreneurial education should be started from school, college, undergraduate level as well as graduate level. Entrepreneurial economics programme must be theory-practical and self-employment and soft skill based along with Economic Incubator should be supported by arranging start-up cost.

 

The writer is a Professor, Macro and Financial Economist and Entrepreneurial Expert, Dhaka School of Economics.

Email:mahboobalidsce@gmail.com

 


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