For example, entrepreneurs may feel the need to continually tweak their operations, which can prevent business processes from being firmly established. By taking an investor role and purchasing an ownership share in a business, entrepreneurs are likely to address business opportunities more strategically to capitalize on short-term performance as well as long-term goals. As new technologies permeate industries of all types, it could be said that all entrepreneurs are technology entrepreneurs in some regard.
However, over the past 40 years the image of technology entrepreneurs has been dominated by billionaires such as Bill Gates, Jeff Bezos, and Mark Zuckerberg. What distinguishes this type of entrepreneur is their practical application of scientific innovations to solve business problems.
Technology entrepreneurs are characterized by their passion and unshakeable belief in the inherent value of the products or services they create. Becoming a tech entrepreneur typically entails working long hours and making financial sacrifices in the short term for the prospects of long-term gain. Tech entrepreneurs must also possess the ability to sell their ideas, persevere through hard times, and make others feel as enthusiastic about their ideas as they do.
Intrapreneurs tend to be self-motivated, proactive, and innovative employees who create an entrepreneurial spirit within their team. However, firms that fail to personally recognize the work of intrapreneurs risk seeing them leave to become true independent entrepreneurs.
Internet-based businesses offer many advantages to entrepreneurs, including low startup costs and the ability to establish an online presence quickly to take advantage of the fast pace of changing markets. However, the low barrier to entry can be a dangerous illusion for online entrepreneurs who fail to realize the hard work and perseverance required to achieve their business goals. Online enterprises require the same time and effort commitment as other forms of entrepreneurship, and they are subject to their own challenges, many related to technology.
For example, an online business will likely rely on partnerships with many different service providers, an outage at any of which could knock the business offline.
Just as no two companies are identical, each entrepreneurial endeavor is as unique as the person behind it. Entrepreneurship styles are as varied as the ideas that spur entrepreneurs to action. One key for entrepreneurial success is to create a company whose strengths match the prominent characteristics of its founder. These are among the most common entrepreneurship styles:. Any field can serve as a springboard for a successful new business enterprise.
Entrepreneurs arise from a range of educational, technical, and business experiences that include management, technology, sales and marketing, and scientific research. In addition to an abiding passion to see their innovations realized, entrepreneurs share certain characteristics:. Growing a business requires a diverse set of skills, but the one trait that ties them all together is leadership. Entrepreneurs transform an idea into a product or service that has value to customers.
Each step in the process from creating the business plan to achieving profitability calls for a range of organizational and interpersonal skills, all of which depend on leadership. Important entrepreneurship skills run the gamut from understanding the risks versus rewards of the business venture, to having a plan in place for responding as circumstances change.
These are the capabilities that entrepreneurs need to make their businesses thrive:. The benefits of entrepreneurship extend beyond the businesses they establish. Entrepreneurs improve the lives of individuals and communities, as well as the overall economy. Entrepreneurs have been instrumental in spurring social change and improving the way people live and work. They help raise the standard of living for everyone by creating jobs and making products safer, less expensive, and more functional.
Despite the many benefits of entrepreneurship, it has inherent risks. Lack of appropriate government oversight can result in unfair labor practices, corruption, and criminal activity. Also, new business ventures have a high rate of failure: According to data from the U. The benefits of entrepreneurship are realized only after much preparation, planning, and hard work. Entrepreneurs need the right foundation in business and management.
Skip to main content. Apply Program Guide. Investopedia describes four ways entrepreneurs benefit society: Economic growth : The success of the products and services created and sold by entrepreneurs cascades to other businesses and markets. Wealth generation : Entrepreneurs frequently target new markets and tap audiences outside the focus of established firms. For example, a few information technology companies made up the IT industry in India during the s.
The industry quickly expanded and many other sectors benefited from it. Businesses in associated industries—such as call center operations, network maintenance companies, and hardware providers—flourished. Education and training institutes nurtured a new class of IT workers who were offered better, high-paying jobs. Similarly, future development efforts in other countries require robust logistics support, capital investments , and a qualified workforce.
From the highly qualified programmer to the construction worker, entrepreneurship benefits a large part of the economy. In the U. Entrepreneurial ventures help generate new wealth. Existing businesses may remain confined to existing markets and may hit a limit in terms of income. New and improved products, services, or technology from entrepreneurs enable new markets to be developed and new wealth to be created. Additionally, increased employment and higher earnings contribute to better national income in the form of higher tax revenue and higher government spending.
This revenue can be used by the government to invest in other struggling sectors and human capital. Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain workers. According to the U.
Small Business Administration, there are Through offering unique goods and services, entrepreneurs break away from tradition and reduce dependence on obsolete systems and technologies. This can result in an improved quality of life , improved morale, and greater economic freedom.
For example, the water supply in a water-scarce region will, at times, force people to stop working to collect water. This will impact their business, productivity, and income. However, with a project such as the U. Agency for International Development's Kenya RAPID program, an innovative and automatic pump powered by smart sensors fills people's water containers automatically, ensuring more than , people now have improved access to clean and safe drinking water.
More time to devote to work translates to economic growth. For a more contemporary example, smartphones and apps have revolutionized work and play across the globe. Smartphones are not exclusive to wealthy countries or people, as more than 5 billion people have mobile devices around the world. Moreover, the globalization of technology means entrepreneurs in developing countries have access to the same tools as their counterparts in developed countries.
They also have the advantage of a lower cost of living , so a young entrepreneur from a developing country can compete with a multimillion-dollar existing product from a developed country. Entrepreneurs regularly nurture ventures by other like-minded individuals.
They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures. Some famous entrepreneurs, such as Bill Gates, have used their money to finance good causes, from education to public health. Are there any drawbacks to cultivating entrepreneurs and entrepreneurship?
Is there a limit to the number of entrepreneurs a society can hold? Italy may provide an example of a place where high levels of self-employment have proved to be inefficient for economic development. Research has shown that Italy has experienced large negative impacts on the growth of its economy because of self-employment. Regulation plays a crucial role in nurturing entrepreneurship. In turn, this sets the foundation for other entrepreneurs to pick up where the failed one left off.
At the same time, it can be useful to new entrepreneurs to see where the previous one went wrong and therefore avoid the same mistakes. Entrepreneurship can create substantial social changes by introducing new goods and services to the market. On an individual company by company basis, new businesses can change our lives marginally. However, on the whole they can change the fabric of society. In turn, this has impacted on cinemas as people are able to stay at home and watch complete series and films on their Netflix account.
We can also look to smaller firms that have started to change society. Furthermore, we also have some bigger online platforms such as Udemy that offer courses for almost anything. Such firms have already started to change the way we learn and provide a change from a traditional classroom setting. Entrepreneurship depends on the average entrepreneur creating a good or service that the public wants.
Some fail and some succeed, although the majority will fail. For instance, 90 percent of new startups will fail within three years. Even though the majority fail, they can create the framework for others to succeed. The original idea can be built upon and developed into something better. For example, MySpace used to be the biggest social networking site in the US between and , yet it has since faded into obscurity.
Even though it still exists, it is only a fraction of the size it was previously. Its failings were identified and solved by Facebook which created a more user friendly platform. So although original entrepreneurs may fail, it is so that another can take over and succeed; providing a better service to the consumer. With that said, entrepreneurship does cause significant levels of chaos. Business will fold, and even though new businesses will come in and benefit, there is disruption in terms of the jobs lost.
Furthermore, there is also the case of entrepreneurs not offering a service that is not morally or ethically acceptable. For example, certain health and safety standards may be forgone in order to cut competition. Yet these same businesses will eventually be driven out by those who offer the best value for money.
Nevertheless, this is still a concern in the short-term. Overall, entrepreneurship is arguably a good thing. It starts with an idea in the head of an individual or group of individuals. So whilst it produces some problems such as the chaos and potential job losses, it produces efficiencies and companies that millions use each and every day. Entrepreneurship is important as it creates new businesses.
People with an idea put it into action and create a new business. This forces businesses to increase their efficiency so customers can get a lower price, but also its innovation.
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