A New French Revolution? Building a National Economy for the #Digital Age
Entrpreneurship- Transforming the global economy
1. 1
How are entrepreneurs transforming the Global economy?
Symbiosis Institute of Management Studies
Khadki, Pune- 411020
Manish Kumar Jena
MBA 2015-17
Marketing- Finance
2. 2
“The world we live in is a mess.”
Financial crisis, poverty, unemployment, water scarcity, global warming, conflicts and the list
goes on. We have an unending list of challenges and the worst part is that there is nothing
that we can do. We are powerless. There is a political deadlock that is stopping us from doing
so. We are in a situation of total despair. But is that the end of the world for those who are
still trying to make things right. I think there is light at the end of this tunnel. Against all
odds, Entrepreneurs are trying their best to bring innovation, new technologies, markets and
new ways of organisation by means of a method by which individuals and teams realise the
new capabilities, create new combinations and challenge the existing practices.
The global economy has tumbled upon various events but I feel the transformation of the
global economy is taking place with the growing entrepreneurship in the world. If you take a
look at the statistics, you will be amazed by the kind of contribution made by the
entrepreneurs all around the world towards the global economy. Well it’s not the result of an
overnight drunk state but the outcome of the next day’s hangover and it’s still on.
In the 19th
century, the innovations that echoed across the United States economy included
the railroad, the steam engine and the telegraph. Similar kinds of technologies were also
reverberating around the globe. India couldn’t witness the emergence of such technologies
until they got freedom but did get the taste of it during the imperial period.
In the 20th
century, those technologies were the analogue sector, the automobiles, the jets, the
satellites and, over the last few years, everything associated with the information technology
and the personal computers. All of that was driven by entrepreneurs.
Indeed, this culture and emergence of entrepreneurship has been central to the economic
success of a lot of countries across the globe. Perhaps, there are a lot of places in the world
where you can earn your first $50 million before you buy your first car or a house, if you
have a sufficiently good idea.
So too, entrepreneurship will play an important role in the renaissance of other places where
entrepreneurship is yet to grow in people’s mind.
What transforms the world is whether the world has an entrepreneur or don’t. In the wake of
such creative effort, entrepreneurs create jobs and spur economic activity.
3. 3
I feel that entrepreneurship drives economy in three ways.
First, it enhances competition and dynamism in the world economy whose shape is
continuously changing.
I always felt that the success of a country is always judged by the size of its skyscrapers and
infrastructural practices. But if you look at the current century, Microsoft, a software
company more or less the creation of an entrepreneur had a greater market capitalization than
the entire U.S. steel, automobile, and aerospace sector combined. And to my surprise this
was before a lot of us had heard about Google.
If we take the example of Wal-Mart we always think of it as an enormous retailer but
compare that with an online retailer company eBay and its online marketplace of 84 million
buyers and sellers.
A famous economist, Joseph Schumpeter once said that there is no such concept like dynamic
equilibrium. Competition yields more competition. Entrepreneurship yields more
entrepreneurship. And change will come quickly.
If you need to understand why the business nowadays is different than it was a few years
earlier, consider this: During 1960s, it took twenty years for a company of the Fortune 500
companies to attain a particular turn over. Today, it hardly takes four years for a similar
turnover.
Second, entrepreneurship clear the way for the assimilation of new technologies that
fuel economic growth.
I would like to describe this point with a story. It reminds me of my trip to my village many
years ago with my parents when mobile phones were just entering the Indian markets. We
used to travel by a boat to go to my uncle’s place and still people do that.
The village was across a small lake and four or five of us were on that boat that the owner of
the boat was paddling. We were on our way to meet my uncle and as we were on the boat my
mom stuck the cell phone on my dad’s face and said, “It’s a call from your office.” A sense
of bewilderment crossed my mind and I was wondering how it is different from the world we
4. 4
live in. Here we were, miles away from the main town of a desperately poor village in or
near a village that was getting a bridge for the first time, and I was able to see my dad talking
to his colleague miles away with a perfect connection and nobody was thinking very much of
it. That’s information technology for you and, yes, that was about entrepreneurship.
More than 4.6 billion People on earth today have access to mobiles. You can ask that
question to yourself and I am pretty certain that you will get your answer. And it’s been
predicted that a 10% rise in wireless penetration in various economies will result in almost
half percent increase in the GDP.
It is this disruptive technology that entrepreneurship brings which will make a difference over
the long-run.
Third, Entrepreneurship gives you opportunity and supports freedom.
Entrepreneurs are creators of new firms and are considered to be rare species. Even in
economies which are innovation-driven, only a meagre percentage of the work force starts a
business in any given year. Yet entrepreneurs are vital to the competitiveness of the economy
of a country and may establish new employments. The pros of entrepreneurship are only
realized, only if the business scenario is adaptive to innovation. Policymakers should work in
the field of creative destruction as entrepreneurs look for creating jobs and opportunities.
For the first time in 13 years, the Global Entrepreneurship Monitor (GEM) study of 59
countries shows that women are creating businesses at a greater rate than men in three
economies and in some others. If you could just imagine the number of employment
opportunities that entrepreneurship is creating you will definitely agree to my third and final
point of how the global economy is being transformed in subtle manner by the entrepreneurs
of this age.
The young demography is attracted by it and as long as the human brain is out of ideas, fear
of failure is off the table and the willingness to contribute to the society is there in people’s
mind, I feel that entrepreneurs will rise again and again and so will the global economy.