Entrepreneurship and Economic Development
Entrepreneurship and Economic Development
ip and
Economic
Development
Dr. Shirley E. Maranan
1. Business Creation: A Global Phenomenon
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Background
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Global Scope
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Assessment Strategy
First Second
• Information was assembled that would describe • Harmonized cross-national descriptions were used to
different states of economic development, with a focus identify different stages of economic development.
on both the economic status and overall well-being of While economic development is an ongoing, continuous
typical citizens. process, analysis of the role of business creation is
simplified if different stages can be identified and
described
Third
• Examination of business creation activities was completed for countries at different stages of economic development. It turns
out that some features of business creation are similar across the major stages while others vary in significant ways.
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2. Economic Development: Structures and
Values
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Source: https://ceoworld.biz/2022/02/28/the-best-places-to-do-business-in-2022-according-to-the-world-citizenship-report/
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Defining Stages of Development
• Subsistence cultures: Mutually interdependent tribal cultures (or
indigenous groups), such as the Lapps in northern Scandinavia, the
Navajo in the southwestern United States (U.S.), and the Suku in
southwestern Congo.
• Agricultural: National economies where the majority of
employment is in farming, forestry, hunting, and fishing, as in
Afghanistan, Ethiopia, Nigeria, and Papua New Guinea.
• Agricultural-Industrial: National economies with most of the
employment in agricultural and industrial sectors, as in Cameroon,
Honduras, India, and Viet Nam.
• Service-Industrial: National economies with more than half of
employment in industrial and customer-oriented sectors, as in
Bolivia, China, Egypt, Mexico, and the Philippines.
• Progressive Service-Industrial: National economies where the
majority of employment is in industrial and customer-oriented
sectors and where progressive values dominate, as in Argentina,
Croatia, Portugal, and Slovenia.
• Knowledge-Service: National economies with most of the
employment is in sectors oriented to consumers or where advanced
training and education are required and progressive values are
widespread, as in Australia, Finland, South Korea, Switzerland, the
United Kingdom, and the United States.
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Diversity in Economic Emphasis
Knowledge-based, which
includes finance and
insurance, real estate,
business and
Agriculture, which administrative services,
includes farming, public administration,
forestry, fishing, and education, and health and
hunting. social services.
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3. Subsistence Economies: Specialization and
Survival
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Definition
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Business Creation Challenges
• Land ownership
• Limited customer base
• Managing credit
• Norm of equality
• Access to capital
4. Agricultural Economies: Existing Farming
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National Context
Agricultural economies are very young countries, as 43% Life may be improving for those in Agricultural
of the population are less than 16 years old and only 3% economies. Three-fifths have confidence in the national
are over 64 years old. Half of the adults are literate, and government, are satisfied with their local community, and
about one-quarter of adults have completed secondary feel they have freedom of choice. About half trust the legal
(high school) education. A small proportion, 3%, have system and feel safe walking outside at night. Less than
gone beyond secondary school for vocational, university, half are satisfied with their standard of living, the quality
graduate, or professional training. About two-thirds of of education, and health care. Only two-fifths consider the
those 15 and older are in the labor force, 73% of men and local labor market, which is largely informal and
58% of women. Most formal jobs, however, do not require unregistered, as good.6 Most of the adults emphasize
a high level of skill and 66% of workers make less than traditional authority and survival individual values, with
$3.60 per day. Only 13% of retirees have a pension. While less than one-fifth emphasizing secular-rational authority
many have work, the benefits are modest. or self-expressive individual values.
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• There are slightly more men than women.
• The majority are from 25 to 44 years old.
• The majority have low to intermediate
levels of human capital.
• Four-fifths are working full or part time as
they pursue business creation.
• Those with less human capital see business
creation as their best choice for participating
in the economy.
• An interest in work autonomy and greater
income attract those with more human
Business creators in general: capital.
• Those with a variety of backgrounds and
interests are involved in business creation in
all sectors.
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New Ventures and
Contribution
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Given this, policy
adjustments to
reduce
bureaucratic
complications or
improve financial
support would
have a modest
impact on overall
firm survival.
5. Agricultural-Industrial economies: Industry
and service
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The National Context
• Compared to Agricultural economies, living in
Agricultural-Industrial economies is somewhat better.
• Life expectancy is 68 years, average adult education is
12 years, and annual income is about $6,000 per year,
three times that of those in Agricultural economies.
• More than two-thirds have confidence in the national
government and the legal system and feel safe outside
at night.
• Three-fourths are satisfied with their local community
and their freedom of choice.
• About two-thirds are satisfied with their standard of
living and the quality of the educational and health-
care systems.
• Only two-fifths consider the local labor market
“good.”
• Most citizens support traditional authority values and
accept personal survival as an appropriate individual
emphasis.
• Overall, the citizens of Agricultural-Industrial
economies seem satisfied with and supportive of their
governments and consider they are responsible for
their own situation.
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