Written by: Harman Aujla
The best way to predict the future is to create it -Peter Ducker. There are 582 million entrepreneurs in the world today and these powerful changemakers are the backbone of the economy on an international scale. Therefore, shouldn’t it be obvious that as a society we do need more entrepreneurs? In this essay, I will be exploring what entrepreneurship is, and why it is important. what makes a successful entrepreneur and why we need more.
An entrepreneur is someone who sets up a business or businesses, taking on financial risks in the hope of profit or a difference in the world. They organize the factors of production (land, labor, and capital) to produce profitable products or services. Successful entrepreneurs have to possess determination and self-discipline which explains why 20% of small businesses fail within the first year and 50% of businesses fail within the first 5 years. There are 2 types of entrepreneurs: necessity entrepreneurs who establish a business due to a lack of other opportunities and opportunity entrepreneurs who are driven by a business opportunity. Business opportunities are like buses: there’s always another one coming.” - Richard Branson. During the COVID-19 epidemic, a lot of people lost their jobs and decided to set up their own businesses to give themselves and others employment opportunities, this is an example of a necessity entrepreneur. However, it should be considered, that 62% of entrepreneurs are self-employed therefore the jobs that they create for others are sometimes arguably limited. As a result of the high amount of self-employment I believe that it is an individual’s hard work that makes a business succeed
It is undeniable that entrepreneurs can increase a country's affluence via the cycle of prosperity. This was increasingly prevalent during the 1920s in the USA after World War 1 as many people set up businesses as the spirit of enterprise grew due to many people chasing the American dream (the idea that hard work leads to success). The American dream was established following the increase in successful businessmen who would extract and sell raw materials which helped make many wealthy people. However, their success was significantly due to the competitive advantage of an abundance of raw materials. Competitive advantage is something that allows a business to succeed over its competitors, for example, its geographic location or its technology, competitive advantage vastly helps the success of a business. The cycle of prosperity emphasizes that more money in an economy encourages people to buy more, therefore demand goods and services increases, which requires factories to make more goods thus production rises and factories need to employ more people in order to meet the high demands which mean there is more work and employment as more people are being paid for their labor and so the cycle continues. For example, Henry Ford started mass producing cars and by the end of the 1920s was producing 1 car per minute which on average cost £295. More cars being produced meant that there was more work needed and therefore there were more people working and being paid. Henry Ford used an organization structure in order to make his business succeed. He used job specialization which made the production of goods faster and more efficient. He assigned different parts of production to specific workers that were skilled in that area, which meant that money would be saved on training and there would be increased profits as the cars would be made faster and of better quality. This cements that having an organization structure is crucial to having a successful business which is further reinforced through companies like Apple and Nike which also use an organization structure.
Another way to have a successful company is to have a pleasant corporate culture in order to motivate and retain skilled employees “Success depends on employees. For me, knowing and connecting with my employees is very important.” - Divine Ndhlukula. In order for a company to attract skilled workers it needs to have a friendly environment within the workers, and working benefits such as discounts and annual holiday leave. For example, Google is famously known for its relaxed workplace culture and is ranked number 2 on business insiders’ best companies to work for in America. Google offers free healthy meals, fitness facilities, on-site child care, and many more perks which result in 84% of employees reporting job satisfaction.
Furthermore, an increase in entrepreneurs will create a much more competitive market whereby businesses will be competing with each other for customers and will have to be more innovative. This can have many positive impacts on consumers as businesses will be producing better quality products for cheaper in the attempt to attract customers however this will decrease the entrepreneur’s profits. I believe that more entrepreneurs will be beneficial to society as they will improve living standards for consumers. However, to succeed as an entrepreneur is difficult which is why it is very unlikely that in the future we will ever have “too many entrepreneurs”. Whatever you do, be different—that was the advice my mother gave me, and I can’t think of better advice for an entrepreneur. If you’re different, you will stand out.” - Anita Roddick, founder of The Body Shop. It is also important to consider that many entrepreneurs are not always motivated by money but by solving environmental issues. For example, I use a search engine called escosia which uses the income from search ads to plant trees. In this case, the owner was not motivated only by personal profit but for the greater good of the climate. By having more social entrepreneurs slowly the world starts improving.
Ultimately, the world does need more entrepreneurs for increased social change, an improvement in consumer living standards, more employment opportunities, and a strong economy. But as a society, we cannot do much to encourage more people to become entrepreneurs as “The man with a new idea is a crank until the idea succeeds.” - Mark Twain. Therefore, an entrepreneur needs to have their own self-belief along with many other attributes such as perseverance and passion.
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