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Entrepreneurship in the Modern Economy Term Paper

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Updated: Nov 25th, 2021

Introduction

Entrepreneurship is defined as the art of putting all the factors of production in the right proportion in order to achieve an effective production of goods and services to satisfy human wants. Due to the ranging economic climate, many entrepreneurs are increasingly finding it difficult to make decisions. The situation has further been exacerbated by the current global financial and economic recession. (American. goc).

This paper discusses some of the challenges and opportunities currently facing entrepreneurs and how some of the organizations are adapting. Understanding the modern economic environment is hard. Many organizations whether in the service or manufacturing sector are subjected to many environmental constraints including competition, rising technology, economic uncertainties, government regulations, limitations on the available capital, professionalism and information technology. These are just but a few challenges facing the entrepreneurs. (THE TIMES 100) This paper gives a classification of challenges imposed on the business environment by the current economic climate and then makes comprehensive analysis of these factors and how the business community is adjusting. As discussed above, the current economic environment has brought many challenges to the entrepreneurs. Some of these include:

Technology: the current business environment is competitive and therefore requires massive use of technology. This has compelled many organizations to radically alter their business structures in order to match the changing technological world. Essential transactions and core business processes have been automated and reengineered. This is to allow an entrepreneur to achieve competitive advantage. However, not many organizations operate automated business systems. Many entrepreneurs cite cost, time and know-how as barriers to the implementation of technology. (Sharma 210) The problem becomes so conspicuous for entrepreneurs in third world countries especially in Africa.

Economic uncertainties: During the period of prolonged uncertainties entrepreneurs are usually perplexed. An example is where the current economic crisis has occasioned high inflation rates, high cost of borrowing both on domestic and foreign debts. Entrepreneurs who make wrong decisions especially during these periods become victims of the moment. In short, economic uncertainties are real stumbling blocks to entrepreneurs. Not many entrepreneurs will make concrete decisions, become accountable to their acts and achieve better result in a rapidly changing economic environment. This is why economic uncertainties remain a big challenge in the modern economic environment. (Tabarok 325)

Qualified workers: The modern economic environment requires professionals who are not only qualified but are also unique, creative and innovative. Competition in the environment means entrepreneurs must devise new methods of production, marketing and advertising if a considerable market share is to be achieved. Only qualified personnel can achieve a better result at any best time possible. A challenge comes in when the qualified professionals begin to seek for higher compensation that is commensurate to their skills and acumen sought thereof. But since the economic climate is unfavorable to the entrepreneurs and therefore they cannot afford to pay these qualified professionals neither can they retain them, they automatically begin to look for greener pastures elsewhere. (Vinig & Van 458)

Opportunities

Technology: The current business climate is characterized by a change from a hard copy to a software environment. In reality, there is a metamorphosis from industrial economy to a knowledge based economy where big organizations are forced to act small and small ones forced to think big. The use of modern technology by entrepreneurs to adapt to the changing moments in itself is an opportunity on its own. Despite time, human personnel and the associated cost of implementing a technology in business, the perceived benefits outweigh the overheads by far. (Vogel 176)

Many entrepreneurs are now tapping the benefits of internet marketing, online advertising, and reduced cost running business. This has been made through the introduction of new information technology. Banking and other financial services providers are benefiting through the use of credit cards, security, recruitment and etc. Most supermarkets now run electronic businesses and etc.

Innovation: Fierce competition and the desire to control and retain clients have made entrepreneurs to be very innovative and creative in every line of business. Despite hard economic circumstances, most organizations have managed to survive due to their creativity and professionalism. Bad economic climate would mean that firms must be unique. This is the opportunity that the current economic climate has presented to the modern entrepreneurs. (Glancey, etal 541).

Conclusion

Entrepreneurship is an important factor of production. The reward of an entrepreneur has remained to be that of profit. However with the economic uncertainties, profit making period may not be certain. The current prevailing economic climate has brought many challenges as well as opportunities. It’s the responsibility of the management to make decisions that can drive entrepreneurs into achieving their core business result. Successful entrepreneurs are those that see opportunity in every difficulty and therefore all entrepreneurs must utilize all the resources at their disposal rather than hiding under the economic crisis.

Works cited

American. goc. What is entrepreneurship? N.d. Web.

Glancey, Keith D., Mcquaid, Ronald W. Entrepreneurial Economics. Palgrave Macmillan. 2000. Print

Sharma, Vivek, Workbook on Entrepreneurship, Abza Publications, India. 2005. Print.

Tabarok A. “Entrepreneurial Economics – Bright Ideas”. The Dismal Science. Oxford University Press. 2002. Print

THE TIMES 100. Opportunities and constraints in the business environment. 1995. Web.

Vinig G.T., Van Der Voort R. The Emergence of Entrepreneurial Economics. Elsevier. 2005. Print

Vogel J.H. “Entrepreneurship, Evolution and the Entropy Law”. The Journal of Behavioral Economics. 18.3 (1989):120-196.

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