Site Loader

Since defining and
measuring entrepreneurship is relatively not easy, therefore, there are less
documented literature to debate on this topic. However, many studies show that
entrepreneurship matters. In fact, there are abundance of literature to
illustrate the meaning of “entrepreneurship”. Some explain entrepreneurship as
occupational notion as to own and manage a business. In a dynamic perspective
entrepreneurship is explained as the creation of new businesses. Some refers
entrepreneurship in the sense of seizing an economic opportunity which need not
be business owners. Entrepreneur also described as someone who specializes in
making judgmental decisions about the coordination of scarce resources.

Any form of economic and
political set-up of a country could not disclaim entrepreneurship as part of
economic development. In fact, entrepreneurship is an approach in both start-up
situation and established businesses. The awareness in entrepreneurship has
developed together with interest in the change of small businesses. For
example, in the years after cold war ended, many factories are closed in
Central Europe and joined global economy. Those workers from the closed
factories had no choice but to self-survived by self-employed. This situation
happens in many country, also Malaysia, when the economies are provoked with
structural change. The last twenty years has witnessed large companies
increasingly concentrating on core competences and mass lay-offs.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

On the other hand, small
businesses have come to lead the technological development in many ways. In
fact, Malaysia has developed through these small entrepreneurships called SMEs.
Even statistical data and its analysis shows that small industries have grown
faster than large industries over the last twenty years. Besides, small
industries created new workplace while the large industries lost jobs. This is
the beginning in promoting a sound entrepreneurial change to achieve economic
progress.

A simple way to explain
the roles of entrepreneur in economic growth is by its ability to create new businesses
and turning them in job opportunities, escalate competition, while also
increasing productivity through technological change. This was also then boost
the levels of economic growth. Barringer and Bluedorn (1999) support the ideas
and added that entrepreneurs are pioneers who discovers opportunities and
exploit with proper evaluation. Even the governments in developing countries apparently
recognize the importance of entrepreneurship as they brought in new ideas and
innovation. Therefore, the government continuously supporting them for economic
growth and sustainable development. These findings mainly agree that
entrepreneur is an agent of change. However, the reality is much more
complicated.

Economic development and
entrepreneurship are closely related. Schumpeter has two opinion that support
this relationship between entrepreneurship and economic development. According
to Schumpeter (1934), entrepreneur is a prime instrument in economic
development. They continuously introducing invention which result in creative
destruction to the current product and technology by making it irrelevant. In
Schumpeter (1950), explain further on the approach of big organization in outperformed
the counterparts through R&D activities. However, these two opinions can be
argued as it may result differently in time and industries. It also depends on
the ability to innovate, opportunities of appropriability, the economics of
scale, the institutional environment, absorptive capacity, variety of demand
etc.

According to Acs, 1990
and Audretsch, 2003, entrepreneurship may affect economic growth in many ways.
This includes introducing important innovations by entering markets with new
products or production processes. In America, entrepreneurs often play vital
roles in early evolution of industries, example of Michael Dell, Thomas Edison,
Henry Ford, Bill Gates, etc. According to the New Straits Times (2017), quote
Dato Seri Najib Razak in his speech in mentioning Fashion Valet’s Vivy Yusof,
actress Neelofa, and Grab Co-Founder Tan Hooi Ling as successful Malaysian
entrepreneur and encourage more entrepreneurs of all generation to follow their
footsteps. These entrepreneurs have increase the productivity by increasing
competition. On contrary, they brought forward the idea on consumer preference
by introducing variations of existing products and services in the market.

Economic progress on the
other hand, can be explained in many dimensions which include climate,
education, saving propensity, property rights, etc. In fact, lots of literature
has explained on variables that may influence economic growth. However, the
word entrepreneurship is not one of them. On the contrary, many economists
claim that entrepreneurial activity is associated with economic progress. They
refer to the ‘communist economies’ which previously has inexistence of
entrepreneurial activity. In fact, there is no source to measure
entrepreneurship, until The Global Entrepreneurship Monitor (GEM) recently
compare this activity across countries.

The studies explain that
a country such as Africa, as an example of least develop country, should
toughen their small and medium sized business sector. After that, they could work
on the entrepreneurial framework conditions. The study also emphasis that the
country should focus on firm’s training, financial assistance, management
assistance and reducing regulatory burdens versus the individual. The goal
should also include to reduce the number of self-employed. Additionally, they should
also start to bring foreign direct investment to the country to create economic
progress.

On the other hand,
developed country such as Malaysia should implement a more balanced approach on
the National Framework Conditions and the Entrepreneurial Framework Conditions.
Depends on the status quo, the country should improve the condition and quality
of the formation which include the law, labour market flexibility,
infrastructure, financial market efficiency and management skills. These are
the requirement to attract foreign direct investment that will leads to provide
employment, technology transfer, exports and tax revenues. Moreover, a sturdy
country’s commitment in education is very necessary. Pajarinen et al. (2006)
added that entrepreneurs with advanced academic background are more innovative
and modernized in doing business.

If the country wants to
be entrepreneurial economies, the focus should be strengthening the
Entrepreneurial Framework conditions as well. This also includes to make
early-stage funding available, strengthen technology transfer, and support
entrepreneurial activity at the state, corporate and educational levels mainly at
the university level. Entrepreneurial activity in developed countries needs to
focus on high value-added, innovation, high-technology and technology
commercialization. Finally, in developed economies the higher education system
needs to play an important role in research and development, technology
commercialization and education. Pajarinen et al. (2006) also added that
entrepreneurs with qualification have better ideas than others.

As a conclusion, entrepreneur roles in economic
development includes creating job opportunities, promote exporting to another
country, reduce regional differences, improve standard of living, creates
wealth, increase the national income and per capita income, and overall growth.
Also, support the idea that entrepreneurs as an agent of change.

Post Author: admin

x

Hi!
I'm Sonya!

Would you like to get a custom essay? How about receiving a customized one?

Check it out