By Kalyani Rajopadhye (rajopadhyeks@uindy.edu)
Dr. Bruce Strom (bstrom@uindy.edu)
University of Indianapolis
This paper recollects the origin and growth of small businesses. It also provides philosophies by a few authors regarding entrepreneurship.
At one time, entrepreneurship was initiated typically by new immigrants to a land since they were typically unable to obtain traditional employment due to their foreign origin. The economic growth of a region thus was proportional to the influx of immigrants. Interestingly, entrepreneurship, commerce and money lending, were, in those days, less than prestigious and were actually looked down upon. Eventually, entrepreneurship was linked with religion as these legitimized trading as a profession, and no longer perceived strangers in a negative fashion e.g. the Protestant sect or Judaism. Several theories and definitions about entrepreneurship were subsequently put forth by sociologists, psychologists, historians and economists over the years. A great deal has been written on the subject by Joseph Schumpeter in the recent literature as he put forth the economic theory of entrepreneurship. He characterizes entrepreneurship as a political or economic individual or an organization in which innovation and change are proposed to be the basis of the system. Thus, he coined the term ‘creative destruction’ for the process of rethinking old ideas and discarding them for newer and better ones (Butler, 2002).
Characteristics of the modern economy are strikingly similar to those found in primitive economies of the ancient world, inclusive of their equivalents of today’s multinationals. Ancient literature reveals evidence for branding and advertising, global economies, virtual corporations, the rise of the nations, foreign investment attraction, industry clusters, knowledge based economy, and knowledge workers and traits such as being mean and lean. Thus, entrepreneurship has come a long way through its evolution into becoming an integral part of every nation’s economy.
This cannot be truer for America. The last two decades have seen a booming interest in entrepreneurship as manufacturing moved away from America, large enterprises that traditionally providing the core of jobs were struggling, and the future did not look pleasant. Thus, the country is in the process of rediscovering its entrepreneurial roots in a hope to create wealth, jobs, opportunities and hope. This has created an emphasis on literature and education related to the subject and has spurred the burgeoning of business schools. It has been argued in the literature that success in entrepreneurial activities has little relation to the business education. Instead, success was related to guts, timing, skill and determination (Butler,2002). Having said this, excellent teaching programs have emerged which are successful in converting education into practical success. There is a need to meet in the middle where theoretical knowledge about entrepreneurship needs to combine with practical experiences in order for entrepreneurial ventures to succeed. Moreover, the knowledge based nature of today’s industry demands cross-disciplinary education and knowledge for new ventures to succeed. Thus, there is an increasing need for industry savvy-scientists as well as science savvy businessmen.
Another feature of today’s commerce is the merging of science and technology with trade due to the revolutionary strides that have occurred in the past century. Thus the economy, today, has largely become knowledge based and cannot stand alone restricted to trade. The amalgamation and specialization creates a world of opportunities for entrepreneurs by virtue of increased needs of the industry today. Not only are there innumerable choices, but trends in the past decade indicate the stable nature of small businesses. While the stock market was very wealthy in the 90s, the wealth of small businesses fizzled. Since 2000, the big company values fell 25% while small company values fell just 4%. Since small companies are not public, their stocks have actually risen in the past couple of years (http://www.entrepreneur.com/Magazines/Copy_of_MA_SegArticle/0,4453,309353,00.html).
Not only have small-company values held up better than the stock market, but right now, formerly scarce and costly items such as labor, facilities and equipment are plentiful and cheap. The average business creates only 60% of the value it is capable of creating. Today, venture capital investments serve as a major impetus for the development and expansion of large and small companies throughout the United States and worldwide. The percentage of security related venture investment in the US has steadily increased since 1999.
The following areas seem to be the most viable fields for entrepreneurial ventures today:
Biotechnology
Computing
Energy/environment
Telecommmunications
Hence, small businesses have demonstrated not only the ability to stay afloat, but also the potential to turn the economy around. Opportunities abound for entrepreneurs in all areas of business.
References:
1. John Sibley Butler. The Science and Practice of New Business Ventures: Wealth Creation and Prosperity through Entrepreneurship Growth and Renewal. 2002. http://www.usasbe.org/knowledge/whitepapers/index.asp.
2. http://www.entrepreneur.com/Magazines/Copy_of_MA_SegArticle/0,4453,309353,00.html
©Copyright 2003 University of Indianapolis
Dr. Bruce Strom (bstrom@uindy.edu)
University of Indianapolis
This paper recollects the origin and growth of small businesses. It also provides philosophies by a few authors regarding entrepreneurship.
At one time, entrepreneurship was initiated typically by new immigrants to a land since they were typically unable to obtain traditional employment due to their foreign origin. The economic growth of a region thus was proportional to the influx of immigrants. Interestingly, entrepreneurship, commerce and money lending, were, in those days, less than prestigious and were actually looked down upon. Eventually, entrepreneurship was linked with religion as these legitimized trading as a profession, and no longer perceived strangers in a negative fashion e.g. the Protestant sect or Judaism. Several theories and definitions about entrepreneurship were subsequently put forth by sociologists, psychologists, historians and economists over the years. A great deal has been written on the subject by Joseph Schumpeter in the recent literature as he put forth the economic theory of entrepreneurship. He characterizes entrepreneurship as a political or economic individual or an organization in which innovation and change are proposed to be the basis of the system. Thus, he coined the term ‘creative destruction’ for the process of rethinking old ideas and discarding them for newer and better ones (Butler, 2002).
Characteristics of the modern economy are strikingly similar to those found in primitive economies of the ancient world, inclusive of their equivalents of today’s multinationals. Ancient literature reveals evidence for branding and advertising, global economies, virtual corporations, the rise of the nations, foreign investment attraction, industry clusters, knowledge based economy, and knowledge workers and traits such as being mean and lean. Thus, entrepreneurship has come a long way through its evolution into becoming an integral part of every nation’s economy.
This cannot be truer for America. The last two decades have seen a booming interest in entrepreneurship as manufacturing moved away from America, large enterprises that traditionally providing the core of jobs were struggling, and the future did not look pleasant. Thus, the country is in the process of rediscovering its entrepreneurial roots in a hope to create wealth, jobs, opportunities and hope. This has created an emphasis on literature and education related to the subject and has spurred the burgeoning of business schools. It has been argued in the literature that success in entrepreneurial activities has little relation to the business education. Instead, success was related to guts, timing, skill and determination (Butler,2002). Having said this, excellent teaching programs have emerged which are successful in converting education into practical success. There is a need to meet in the middle where theoretical knowledge about entrepreneurship needs to combine with practical experiences in order for entrepreneurial ventures to succeed. Moreover, the knowledge based nature of today’s industry demands cross-disciplinary education and knowledge for new ventures to succeed. Thus, there is an increasing need for industry savvy-scientists as well as science savvy businessmen.
Another feature of today’s commerce is the merging of science and technology with trade due to the revolutionary strides that have occurred in the past century. Thus the economy, today, has largely become knowledge based and cannot stand alone restricted to trade. The amalgamation and specialization creates a world of opportunities for entrepreneurs by virtue of increased needs of the industry today. Not only are there innumerable choices, but trends in the past decade indicate the stable nature of small businesses. While the stock market was very wealthy in the 90s, the wealth of small businesses fizzled. Since 2000, the big company values fell 25% while small company values fell just 4%. Since small companies are not public, their stocks have actually risen in the past couple of years (http://www.entrepreneur.com/Magazines/Copy_of_MA_SegArticle/0,4453,309353,00.html).
Not only have small-company values held up better than the stock market, but right now, formerly scarce and costly items such as labor, facilities and equipment are plentiful and cheap. The average business creates only 60% of the value it is capable of creating. Today, venture capital investments serve as a major impetus for the development and expansion of large and small companies throughout the United States and worldwide. The percentage of security related venture investment in the US has steadily increased since 1999.
The following areas seem to be the most viable fields for entrepreneurial ventures today:
Biotechnology
Computing
Energy/environment
Telecommmunications
Hence, small businesses have demonstrated not only the ability to stay afloat, but also the potential to turn the economy around. Opportunities abound for entrepreneurs in all areas of business.
References:
1. John Sibley Butler. The Science and Practice of New Business Ventures: Wealth Creation and Prosperity through Entrepreneurship Growth and Renewal. 2002. http://www.usasbe.org/knowledge/whitepapers/index.asp.
2. http://www.entrepreneur.com/Magazines/Copy_of_MA_SegArticle/0,4453,309353,00.html
©Copyright 2003 University of Indianapolis
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