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A description of entrepreneurship in three selected countries, including ananalysis comparing and contrasting their states of entrepreneurship
An increase in the importance of knowledge as a path way to achieving a competitive advantage in the modern economies is a clear indication that industries are always focused towards more innovations and unrestrained competition in order to achieve high growth rates. The entrepreneurial activity forms the most essential part of any country’s economy in the present global business environment. Global Entrepreneurship Monitor (GEP) conducts a research about the economies of 70 countries worldwide. Out of these countries, this research has selectedthree countries. These are United States of America, China, and Nigeria. I chose these countries because of their contribution towards the global economy in their respective continents.
United States (USA)
The Global Entrepreneurship Monitor (GEM) team in USA is located at Babson College. USA is one of the world’s largest economies with a (Gross Domestic Product) GDP growth rate of over 2.2% since 2008 (Daily Post, 2014). According to GEM United States Media report in 2013, the countries entrepreneurship rose at an alarming rate in 2012. The report indicated that more than 12.8 per cent of US adults are entrepreneurs involved in various business activities that generate a lot of revenue for the country. In addition, the report discovered some individuals have big businesses that have been in operation for more than three years. Most people starting new businesses in USA do so in order to get an opportunity to earn cash, but not with an entrepreneur mind (GEM U.S.A Report 2012, 2013).
According to Sekishita (2013), globalization has led to a more challenging business environment whereby traditional business models have no place in the current economy. The high access to more information through technology advancements assisted many people in USA become entrepreneurs because they learn new business ideas from their friends in other countries through the internet. USA has promoted new businesses through bringing together entrepreneurs to manage business networks in order to invite more people to become entrepreneurs. USA, however, faces a draw back in its effort to promote more people to get into various businesses because of the fear of another hit by economic recession. Such risks have become barriers for some potential entrepreneurs from launching their own ideas. The study by GEM revealed that a third of the USA population have excellent business ideas, but fear implementing them due to such constraints. The situation has led to many Americans venturing in very successful businesses in other parts of the world.
The GEM team in China is located at the National Entrepreneurship Research Center, Tsighua University. The body has done an excellent work in determining the state of economy of the country and comparing it with the rest 69 economies researched by GEM worldwide. In order to improve the state of economy in China, the body suggests that the country should focus on reinforcing the entrepreneurial morale and increase entrepreneurship power. After the first year of reform in China in 1978, the country has enjoyed a state owned sector that accounts for over 90 per cent of its GDP. China is one of the emerging economies that enjoy a higher competitive advantage because of the many industries producing all forms of products used globally. China’s entrepreneurship power ranges from village businesses, industries found in rural areas, and towns that contribute to a growing proportion of the country’s economy. Foreign investors also play a significant role in improving the entrepreneurship power of the Chinese economy since 1990s (Huang, 2010).
Entrepreneurs in China have created new firms that are the key drivers of the recent observed growth. In addition, these firms are technologically advanced and very innovative attracting the attention of consumers worldwide. For instance, in 2002, China experienced a high turnover of over 2 million private enterprises, which accounted for high employment rates of more than 34 million people. Private enterprises are the third largest economic contributors in China from government sectors and state-owned enterprises. The high growth of the private enterprises in China started in the mid 1990. Since 1994, China has experienced an increased growth in the urban area, although the private businesses in rural areas performed poorly. The Chinese government has encouraged its entrepreneurs to work hard and open up new industries in order to sustain the economy and create more job opportunities (GEM China, 2013).
Entrepreneurs in China face some problems that hinder them from fully investing their potential into the global business. Lack of enough property and inadequate land in China because of government regulations had been a major source of problem. Currently, the government has allowed privatization of buildings, but limited to some capacity. Secondly, entrepreneurs in China have excellent business ideas, but lack access to enough capital to start their new businesses. A survey conducted in China in 2012 showed that out 50 million small and medium-sized businesses, only 2 per cent get access to bank loans. However, currently China enjoys the best global business environment with many production industries. In addition, the Chinese financial crises led to new opportunities for entrepreneurs to improve their businesses. An increase in number of entrepreneurs has led to an expansion of the Chinese market size, improved corporate governance, and production of high quality products. Moreover, the government has taken the responsibility of making the financial environment favorable for every entrepreneur regardless of the type and size of business through introducing policies that support tax incentives (Huang, 2010).
In Nigeria, GEM team stays in TOMEB Foundation for Youth Development & Sustainability. The base was opened in 2010. Nigeria is one of the leading countries in Africa with stable economies. The country houses many entrepreneurs due to its rich in oil and gas wells.When Nigeria became a democratic country in 1999, a period of economic reforms followed and the government introduced new business reforms. Effective entrepreneurship was the only way for the country to achieve a sustainable growth. Leaders of all sectors came up with a plan to reinvest and create financial regulations aimed at boosting businesses in all sectors. Both micro and small-medium enterprises have put more efforts to sustain the economy of Nigeria through extensive entrepreneurship activities (CIA World Factbook, 2013).
A developing country like Nigeria is considered a low-income area with annual per capita income of less than 1,0000 U.S. dollars. Even if the country suffers a low-income, it has done its best to attain a better than average economic growth compared to other developing countries in Africa. Nigeria recorded the highest GDP growth in 2005 in the whole of Africa, 6.9 per cent growth. According to GEM, Nigeria’s economy is on the upward thread as many young entrepreneurs enter the oil and gas business. The country’s economy has significantly improved over the last few years that has provided a favorable business environment for entrepreneurial. Another motivating factor that makes Nigeria’s economy grow fast is the favorable tax rates levied by the government. GEM report indicated that Nigeria has the lowest tax rates amongst all GEM associated economies. The welcoming environment in Nigeria also gives chances for investors from other countries like U.S. to open up new businesses, hence; helping increase government revenues (GEM Nigeria, 2013).
According to Falola (2012), the main problem with developing countries like Nigeria and others in Africa is the lack of exposure to technology and innovations. The country has not yet established professionals in the field of science and excellent researchers to help in enhancing innovations. The level of exposure of Nigerians to entrepreneurial has no significant effect because of lack of exposure to many credit facilities. Individual in from western countries are highly exposed to credit facilities in terms of bank loans, bonds, mortgages, and credit cards that make them have many innovations and have morale to invest in businesses. In Nigeria, lack of such facilities have led to poor response to entreprene.............
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