Question

how has entrepreneurship impacted the economy of urban areas? What are the differences between social entrepenuership & entrepenuership? Also what are ways entrepenuers influence the economy? (in depth explaination)

Answer 1

The word "entrepreneur" comes from the French verb entreprendre, meaning "to undertake". Through Entrepreneurship, emerging businessmen not only start a new business and promote economic activity, but also innovate new things or restructure previous organisations to become more efficient. to put it simple, entrepreneurship is the execution of ideas. Some of the varioud characteristics an entrepreneurship must exhibit and have is motivation , optimism, passion, flexibility, persuasiveness, decisiveness, future oriented approach, problem solving approach and much more.

Most entrepreneur-ship studies have been carried out in urban areas in which entrepreneurship flourishes due to localization effects, urbanization effects and the ’creative class’argument (Glaeser et al., 2010). The superiority of larger cities in producingadvanced economies has been acknowledged since the time of the ancient Greeksto the time of the Italian city-states (Botero, 1588), and this does not seem tobe different today (Glaeser, 2011). The higher economic performance of urbanareas has been explained by a wide variety of theories ranging from the divi-sion of labour (Smith, 1776) to capital accumulation (Marx and Engels, 1848).

Economy of urban areas experience a myriad of benefits arising due to entrepreneurship. Massive employment takes place as new startups emerge in the markets. The cities are integrated economies with diverse and large markets which in return help the entrepreneur to maximise profits. Large markets allow firms to benefit from economies of scale and generate externalities providing further incentives to entrepreneurship, innovation and growth. this creates a ripple effect resulting in more and more development in cities.

Entrepreneurs add to the gross income of the cities. Existing businesses may remain confined to their markets and eventually stop gaining profits. But new products or technologies create new markets and new wealth. And increased employment and higher earnings contribute to a nation’s tax base, enabling greater government spending on public projects.Also, this results in growth of allied industries. For example, a lot of IT industries or manufacturing startups lead to the generation of service providers, call centers and customers service industries.

What are the differences between social entrepreneurship & entrepreneurship?

What is the difference between social entrepreneurship and business entrepreneurship? Both approaches fulfill a need in the market and aim to earn a profit. The main difference is that social entrepreneurship focuses beyond simply generating a profit, and also cares about the positive impact the business makes on the social, cultural or environmental aspects of the society. This focus on generating positive social returns make social enterprises an important alternative to conventional and outdated “corporate social responsibility” models which tend to only occur once healthy profits have been achieved.

Business entrepreneurs focus more on the maximising their revenues. Their main goal is to satisfy customer needs, provide growth for shareholders, expand the influence of their business, and to expand their business during which some might neglect the bad effects their business has on the society and environment. Whereas, social entrepreneurs aim at making the planet a better place to live in. They do not care about product and might work with minimal resources and manpower. The social entrepreneur’s focus is the betterment of the society, ecological health and well being. Once they realize an obstacle in the local community, surroundings, or methods of the people, they seize actions toward helping resolve that drawback. They choose to concentrate on issues such as inequality, health, environmental threats, poverty , high crime rates, etc. Social entrepreneurs invest in community projects and help charities and other non-profit organizations, supporting causes beyond their own. Bill Gates, for example, has used his considerable wealth for education and public health initiatives.

What are ways entrepreneurs influence the economy?

As we economies expand, integrate and be co-dependant, we see a common factor which has huge positive spillover effects in the economic development of a nation.This common factor is the most important role played by entrepreneurship and entrepreneurs in such economies. If an economy is to develop fully, entrepreneurship should be allowed to flourish.  Lets see how entrepreneurship incfuences economic growth

1. Entrepreneurs induce economic growth

New products and services created by entrepreneurs can produce a cascading effect, where it stimulates related businesses or sectors that need to support the new venture, furthering economic development.

2. Providing employment opportunities.

New businesses require and thus hire employees. They create jobs and these economic opportunities uplift and support communities through increasing the quality of life and overall standard of living.New businesses need to hire employees. They create jobs and these economic opportunities uplift and support communities through increasing the quality of life and overall standard of living.

3 Entrepreneurs contribute to the National Income

Entrepreneurial ventures help generate new wealth.Additionally, increased employment and higher earnings contribute to better national income in the form of higher tax revenue and higher government spending. This revenue can be productively used by the government to invest in other struggling sectors, infrastructural development and human capital.

4. Entrepreneurs increase competition in the market.

By establishing new businesses, entrepreneurs increase competition for existing businesses. Consumers benefit from the resulting lower prices and greater product variety.

5. Innovative solution and creation of new markets.

Entrepreneurs innovate by creating new businesses in response to unmet needs and demands in the market. That is, there is an opportunity to provide a product or service that is not currently in existence, or otherwise available. Thus new markets are generated and more and more problems and solved and their is a increase in efficiency.

6. Addressing environmental challenges.

Innovation in areas such irrigation, solar power, waste management, farming, rain water harvesting address crucial economics issues and provide a hope at solving them

7. Entrepreneurs Create Social Change

Entrepreneurs may donate a a part of their income for upliftment of society and addressing their needs. For example, many startups innovate low cost house construction as a part of their R&D and donate it to the homeless. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.

To conclude and by assessing the bigger picture, positive impacts of entrepreneurs on an economy, far outweigh the negative impacts. Employment generation, reduction in unemployment levels, increase in competition, opening new markets, increase in productivity, and poverty reduction, social and environmental change are some of the positive impacts that entrepreneurs have on an economy.

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