Entrepreneurship Why Entrepreneurship Is Important Thesis
- Length: 12 pages
- Sources: 5
- Subject: Business
- Type: Thesis
- Paper: #48921043
Excerpt from Thesis :
While entrepreneurial accomplishment is common across all nations the ability to create and sustain value-based ecosystems as rapidly as American entrepreneurs are unique (Arbaugh, Camp, Cox, 2005).
American Entrepreneurs' Contribution to Global Innovation
Innovation in and of itself is not enough to create entirely new businesses; it is in translating innovation into unique, ingenious products and services that meet unmet needs of both consumers and businesses. The current economic downturn, it has been argued, is an excellent opportunity for entrepreneurs to create disruptive innovations (Christensen, Mangelsdorf, 2009) that completely re-order market dynamics and redefine value chains in the process (Porter, 1986). Disruptive innovation as defined by Clayton Christensen is entirely dependent on small start-up companies to exist then re-order entire industries in the process (Christensen, Mangelsdorf, 2009). What is so noteworthy about the research completely by Dr. Christensen and Mangelsdorf (2009) is that the catalyst of each disruptive innovation as emanated from small, entrepreneurially-run companies. Core to the unique strengths of entrepreneurs is their ability to translate unmet needs in markets and then selectively apply innovation to them in order to create entirely new market segments. This has also been empirically seen in the findings of Dr. Christensen in his book The Innovator's Dilemma. For disruptive and even chaotic innovation to translate into entirely new markets being formed, entrepreneurs must have a government that fosters this process. The United States Government and is support of policies that favor the creation of new innovation is seen in the clustering of technology centers throughout this country (Gittell, Sohl, 2005). No other nation has as many innovation clusters as the United States, and it is the result of pro-government policies with regard to intellectual property growth, investment in education and knowledge institutions, and the development of high-speed computing infrastructure which allows for real-time collaboration. All three of these factors are present in the Boston Area along Route 128, the Research Triangle of North Carolina, and the Silicon Valley of Northern California. The combining of government investment in infrastructure, support for exceptional universities and knowledge creation, and tax incentives for new business growth all favor the start-up of new businesses. These regions of the country are abundant in innovation as they attract entrepreneurs who are capable of translating it into marketable ideas, products and services (Gittell, Sohl, 2005). Creating these zones of entrepreneurial growth is unique to the United States, as are the underlying processes to support these areas have gone on for decades. As is also the case with the value-based ecosystems that lead to exceptional employment growth over time, the same holds true for new venture creation in these regions. It is also noteworthy that these regions are only sporadically located throughout many other European and Pacific Rim nations (Arbaugh, Camp, Cox, 2005).
Entrepreneurship in the United States is further differentiated from an innovation standpoint by the pro-start-up mentality of the country's best universities. Stanford University's Entrepreneurship Center regularly hosted the nations' top achieving entrepreneurs and seeks their guidance specifically in the area of how to create greater opportunities for students to experience what is required in creating a start-up. As Stanford University has graduated the founders of Google, Yahoo, and many other Silicon Valley start-ups that have grown to become multi-billion dollar companies, the university invests heavily in capturing this knowledge and sharing it with students. It is common to find Sergei Brin and Larry Page giving speeches on how to create entrepreneurial cultures that prize innovation while attaining goals for example. Mr. Brin and Page are the two PhD students who while attending Stanford University came up with the idea for the Google PageRank algorithm. There are also examples of how Jerry yang, completing his PhD studies at Stanford in an overflow trailer on the campus, showed his advisors of how he could index the Internet and Yahoo was born. That is the essence, the catalyst of what makes American entrepreneurialism excellent. The ability to capitalize on investments in infrastructure, continued insistence on the value of learning and knowledge, and then combining the unique and highly creative approaches entrepreneurs have in defining and then tailoring technologies to the unique needs of customers. For Sergei Brin, Larry Page and Jerry Yang, the customers were the literally millions of Internet users around the world today. These remarkable achievements would not have been possible in any other nation by the United States. Nowhere else would the investments in infrastructure, so assiduously applied over time, combined with the strong value our nation has for education and academic achievement through knowledge, be pursued with such determination. In combining those factors and with due credit to the entrepreneur who started these great universities including Leland Stanford, founder of a railroad, none of these innovations or companies would exist. It is then the value-based ecosystems that matter most, and it is thankfully foresightful that American federal and state governments have been cognizant enough of these factors to nurture them. Only through these combining of factors, so unique and so indigenous to the United States, that these regions of the country serve as the nurturers of entrepreneurial growth. In these centers is the future of the nation's economy as well.
Great entrepreneurship is also found in how readily disruptive, even chaotic technologies that redefine basic needs are accepted and then turned into a new market standard. Consider the growth of Apple Computer from literally a breadboard with cables and wires on it to arguably the most innovative company in the high tech sector today. Apple's founders, from the very first day, were on a persona mission, a very passionate one in fact, to completely re-order how education was accomplished in the world. The first Apple computers were designed purely for the elementary school student and the hobbyist. Even in 1977 the founders had a very clear vision of exactly what they wanted to accomplish; their vision is what propelled the company through incredibly difficult times, all endured for the sake of the passionate mission to change how the world used computers (Arbaugh, Camp, Cox, 2005). Arguably Apple would have faced much tougher challenges in other nations, as the United States had a large, relatively easily accessible market for their initial systems and other nations did not. In addition, the vast public school system of the United States provided an excellent test bed for future product designs. Apple found partnerships with customers transformed them into fans; they were able to transform them from being merely someone who had bought a product to someone who had bought into the vision of what Apple stood for. Apple's quick dominance of education (less than five years) and today the quality of their operating systems many consider to be equal to or exceed Microsoft, is a testament to how the American framework of supporting entrepreneurs honors nonconformity and even celebrates it. Too often when studies are done of the entrepreneurial framework within the United States and its effectiveness relative to other nations, the tendency to look at only those linear or compliant approaches to growth are considered (Hessels, Gelderen, Thurik, 2008). Paradoxically the greatest strength of entrepreneurship in the United States is the ability to tolerate such wide variations in how start-ups choose to define themselves and then exceed customer expectations. It is truly a fascinating dynamic of the United States to consider how innovation created by entrepreneurs is transformed into lasting customer- and shareholder value.
American Entrepreneurs' Contribution to Social and Private Wealth Creation
Over time the greatest contribution of entrepreneurs is the creation of personal and social wealth (Audretsch, 2009). Consider the recession the United States is experiencing and the dramatic declines in private-sector Venture Capital spending, new venture risk capital and even the ability of companies to file for Initial Public offerings. Even in the midst of these challenging times however, entrepreneurs are paying 54% of all individual income taxes and 60% for corporate tax returns from S-Corporations (Kuratko, 2007). Segmenting only their state income taxes, entrepreneurs typically contribute over 60% of the local and city property taxes as well (Kuratko, 2007). Still start-up companies are able to generate profits, pay their employees, invest in R&D and create next-generation products to meet or exceed competitive threats and expectations. The social welfare generated by entrepreneurs in the United States far outstrips government spending, and in fact creates the most stable tax base the U.S. government has to rely on today (Fourie, 2008). In attaining their objectives of growing a business, entrepreneurs enrich not only their employees; they enrich their communities as well. The Corporate Social Responsibility (CSR) programs of start-ups are now common place, especially in the area of globalization as well. It is rare to find any start-up that is globally oriented that does not have a CSR program in place to assist those nations of the world they are expanding into. The idea of "doing well by doing good" pervades even the most bootstrapped start-ups that seek to…