The Dynamics of Entrepreneurship
Entrepreneurship is first and foremost a mindset. It covers an individual's motivation and capacity, independently or within an organization, to identify an opportunity and to pursue it in order to produce new value or economic success. It takes creativity or innovation to enter and compete in an existing market, to change or even to create a new market.
To turn a business idea into success requires the ability to blend creativity or innovation with sound management and to adapt a business to optimize its development during all phases of its life cycle. This goes beyond daily management: it concerns a business' ambitions and strategy.
Entrepreneurship is about people, their choices and actions in starting, taking over or running a business, or their involvement in a firm's strategic decision-making. Entrepreneurs are a heterogeneous group and come from all walks of life. Yet there are certain common characteristics of entrepreneurial behaviour, including a readiness to take risk and a taste for independence and self-realization
Entrepreneurship can occur in any sector and type of business. It applies to the self-employed and to firms of any size throughout the various stages of the business life-cycle, from pre-start to growth, transfer or exit and re-start. Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-taking, creativity and/or innovation with sound management, within a new or an existing organization.
According to the Global Entrepreneurship Monitor (GEM) the more individuals that participate in new business formation, the more entrepreneurial is the country.
Jamaica, classified as middle-income, high growth, has one of the highest levels of entrepreneurial activity as measured by the Total Early-Stage Entrepreneurial Activity prevalence rate (the combined count of nascent entrepreneurs and new business owners).
The rate is 17.0%, while the prevalence rate for established business owners is 9.5%. This means that 17% of the adult population or approximately 391,000 individuals were actively planning or had recently established a new business. Of this number 241,500 were nascent entrepreneurs and 154,100 had established a business in the 42 months prior to June 2005. Jamaica's overall rate of entrepreneurial activity compares favourably with countries such as New Zealand, (2005 - 28.26%) considered among "the world's most entrepreneurial countries".
Why is entrepreneurship important?
Entrepreneurship contributes to job creation and growth
It is increasingly new and small firms, rather than large ones, that are the major providers of new jobs
Countries exhibiting a greater increase in entrepreneurship rates tended to exhibit greater subsequent decreases in unemployment rates.
Entrepreneurship can also contribute to fostering social and economic cohesion for regions whose development is lagging behind, to stimulating economic activity and job creation or to integrating unemployed or disadvantaged people into work.
Entrepreneurship is crucial to competitiveness
New entrepreneurial initiatives, either starting a new firm or reorienting an existing one (e.g. after the transfer of a business to a new owner), boost productivity. They increase competitive pressure, forcing other firms to react by improving efficiency or introducing innovation. Increased efficiency and innovation within firms, whether in organization, processes, products, services or markets, enhances the competitive strength of an economy as a whole. This process offers consumers benefits through greater choice and lower prices.
Entrepreneurship unlocks personal potential
An occupation is not just a way to earn money. People have other criteria in their career choices, such as security, level of independence, variety of tasks and interest in their work.
Higher income levels may prompt people to fulfil 'higher needs', such as self-realization and independence, through entrepreneurship. Surveys have found that, in addition to material motivations (money and status), people chose to become entrepreneurs as a means to self-fulfillment (freedom, independence and challenge).
For some, who cannot find a regular job to their satisfaction, the choice of becoming an entrepreneur may stem partly or entirely from economic necessity. Becoming an entrepreneur may provide them with the prospect of creating a better position for themselves.
European Commission- Enterprise Directorate General - Report of the seminar "Entrepreneurship and SME's" Brussels DG ENTR.B.1/FvH D (2003)
Global Entrepreneurship Monitor 2005 Jamaica Report ISBN 976-8027-24-X
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