Question

We often observe that some of the most important pieces of the entrepreneurship-economic growth-development puzzle are sometimes the least tangible. Establishing a culture of risk-taking that treats failure as a learning experience is important. So too is cultivating the perspective that entrepreneurship is about creating positive sum games: i.e., mechanisms and environments through which the possibility exist for 1+1= 3. This win-win outcome and environment is, arguably, starkly different than that produced by the zero-sum “competitive mindset” of traditional businesses. This is especially the case in mature and underdeveloped economies.

Discuss whether the above notion about typologies of economies and the role of entrepreneurism in their economic growth and development is reasonable.

Answer 1

Entrepreneurship and economic development are highly correlated and have sparkling chemistry which facilitates economic prosperity and sustainability towards future and is plausible to claim that it is the engine driver of growth as we see how Germany, Japan, China have evolved over the years.

Entrepreneurship has been undervalued and has not sene sufficient interlinkages to growth of economy.

However the real fact is that entrepreneurship makes individuals job creators than job seekers and hence the cascading effects come into picturesque where each entrepreneur creates thousands of jobs on average and who in turn reduce unemployment rate and drive the economy. If these efforts are coupled with an expansionary fiscal policy by government and relaxation in startup laws and labor codes, the magic kicks in and brings higher disposable incomes which all in turn raise consumption and aggregate demand and sledgehammers economy to higher potential. These institutional conditions like private investment and cultural inhibitions of perceiving entrepreneurship as less risky helps drive economic engines.

Startups nowadays have globalised and have caused widescale disruption and also brought in tectonic changes and have become unicorns with market capitalization of 1 billion dollars and more. Specifically in US and China, nujber of unicorns have surpassed 220 which are now undoubtedly the kickstarter to stagnant economy.

International managers operate under global uncertainty, volatility in stock prices and fluctuating exchanges rate as well as changing customer preferences and stringent compliance to global laws and cultural dissonance.

However to remain competitive, managers need to have cultural intelligence and cross domain experience in managing different cultural dynamics.

Best traits for global manager are Emotional Intelligence and Leadership which are important and critical to success of global firms.

Global trends like the convergence of US gAAP and IFRS accounting standards, coupled with double taxation avoiding agreements between nations have most influence in global organisation.

This has helped firms to remain tax compliant using best of breed methodology and also be tax efficient and tax buoyant. It has lowered compliance and legal costs amd additional manpower and move ase to new nations with relaxed laws and high trading standards