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Entrepreneurship Has Emerged As Theeconomic Engine and Social Volume 12 Issue 1 Version 1.0 January 2012 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Inc. (USA) Online ISSN: & Print ISSN: Abstract - This paper consists of an introductory survey of two fundamental questions regarding the link between international entrepreneurship and economic growth. The first step in establishing the linkages requires the formulation of knowledge about the psychological make-up of entrepreneurs. The paper explains that Entrepreneurial activity breeds innovation, injects competitive pressures and develops opportunities in economies. It is the foundation in many respects for broader economic development. Entrepreneurship polices are equally important, as an engine of innovation, in developed countries as they are in developing or transition economies. The purpose of this paper is to explain why the model of the entrepreneurial economy maybe a better frame of reference than the model of the managed economy when explaining the role of entrepreneurship in the contemporary, developed economies. While borrowing constraints or other financial frictions affect entrepreneurship productivity and the distribution of income by restricting agents from profitable occupations that require capital, such as entrepreneurship, this paper is devoted to exploring issues aiming to increase national wealth and to improve international competitiveness of the national economy. Keywords : entrepreneurship, small firms, economic growth, economic development, policy GJMBR Classification : Code: 150304, L26 Entrepreneurship Has Emerged As the Economic Engine and Social Development throughout the World Strictly as per the compliance and regulations of: © 2012 Dr. Ghirmai T Kefela.This is a research/review paper, distributed under the terms of the Creative Commons Attribution- Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. Entrepreneurship Has Emerged As the Economic Engine and Social Development throughout the World Dr. Ghirmai T Kefela Abstract - This paper consists of an introductory survey of Entrepreneurs produce solutions that fly in the. uary 2012 two fundamental questions regarding the link between face of established knowledge, and they always n a international entrepreneurship and economic growth. The first challenge the status quo. They are risk-takers who J step in establishing the linkages requires the formulation of pursue opportunities that others may fail to recognize or knowledge about the psychological make-up of entrepreneurs. 99 may even view as problems or threats. Whatever the The paper explains that Entrepreneurial activity breeds innovation, injects competitive pressures and develops definition of entrepreneurship, it is closely associated opportunities in economies. It is the foundation in many with change, creativity, knowledge, innovation and respects for broader economic development. flexibility-factors that are increasingly important sources Entrepreneurship polices are equally important, as an engine of competitiveness in an increasingly globalized world of innovation, in developed countries as they are in developing economy. Thus, fostering entrepreneurship means or transition economies. The purpose of this paper is to promoting the competitiveness of businesses. explain why the model of the entrepreneurial economy maybe The paper advocated a shift in paradigm in re- a better frame of reference than the model of the managed thinking entrepreneurial failure in the developing economy when explaining the role of entrepreneurship in the countries. In these models, borrowing constraints or contemporary, developed economies. While borrowing constraints or other financial frictions affect entrepreneurship other financial frictions affect productivity and the productivity and the distribution of income by restricting distribution of income by restricting agents from agents from profitable occupations that require capital, such profitable occupations that require capital, such as as entrepreneurship, this paper is devoted to exploring issues entrepreneurship. To understand the significance of aiming to increase national wealth and to improve international entrepreneurship for national economies it is important competitiveness of the national economy. to consider cross-border entrepreneurship or the Keywords : entrepreneurship, small firms, economic involvement of SMEs and new ventures in the growth, economic development, policy international economy. Cross-border activities, such as exports, are an important means through which small I. INTRODUCTION and new ventures are able to create value, to generate nternational entrepreneurship involves a combination growth and to access new knowledge and technologies of innovative, proactive, and risk-seeking behaviors abroad (Yeoh, 2004). Governments support cross- Ithat crosses country borders, and is supposed to border entrepreneurship and in particular exports with create value in organizations. International the aim to increase national wealth and to improve entrepreneurship uses technological and regulatory international competitiveness of the national economy advances to improve the flow of information, (OECD, 1997).The missing links to successful transportation and resources across global borders. entrepreneurship were identified to be entrepreneurial International entrepreneurship may involve the competencies, defined as the cluster of related discovery, enactment, evaluation, and exploitation of knowledge, attitudes, and skills which an entrepreneur opportunities- across country borders- in order to create must acquire or possess to enable him produce goods and services. The strategic role of the outstanding performance and maximize profit in the entrepreneur as an agent of economic transformation in business. These entrepreneurial competencies were the critical success factors to entrepreneurship, and they society is visible in employment and wealth generation, Global Journal of Management and Business Research Volume XII Issue I Version stimulation of indigenous entrepreneurship or promotion deserve serious consideration in entrepreneurial of entrepreneurial culture. In the recent development discourse and not to be neglected. literature occupational choice is at the center of the Entrepreneurship, as measured by various development process (e.g. Banerjee and indicators such as start-up activity rates or the increase Newman(2000), and Galor, 1993). Able individuals who in business ownership, plays an important role in start poor are doomed to remain poor. national economies (Van Stel, 2006). Entrepreneurship is considered to be an important mechanism for national Author : 2300 Airport Blvd. San Jose, CA 95110, USA 95110, USA. economic development e.g. through its contribution to E-mail : [email protected] the generation of employment and innovation (Acs and © 2012 Global Journals Inc. (US) Entrepreneurship Has Emerged As the Economic Engine and Social Development throughout the World Audretsch, 2003; Baumol, 2002; Carree and Thurik, medium enterprises (SME) on the socio-politico- 2003; Wennekers and Thurik, 1999; Schumpeter, 1934). economic life of emerging economy is quite obvious. It However, considerable differences exist between is clear that the domain of international entrepreneurship countries in the extent to which entrepreneurship is is rich in opportunity. growth- or innovation oriented (Autio, 2007; Hessels, Because the field is broad, there are many van Gelderen and Thurik, 2008a), and consequently in interesting research questions to be explored, and many the extent to which entrepreneurship contributes existing theories may be beneficially employed. positively to national economic development. Therefore, Opportunities for both multidisciplinary and multi- it is essential for scientists, policy makers and country collaboration are clear. entrepreneurs, to gain insight into the factors that affect Entrepreneurship has been an engine of the emergence of entrepreneurship and into the sustained economic expansion in both developed and economic outcomes of entrepreneurship. A substantial uary 2012 emerging economies (e.g., Baumol, 2002; Peng, 2001; n a part of this paper is devoted to exploring such issues. J Smallbone & Welter, 2001; Thornton, 1999). One critical One particular type of entrepreneurship that receives success factor for entrepreneurial firms is gaining 100 considerable attention in this paper is international sufficient access to external sources of finance entrepreneurship. (Ahlstrom & Bruton, 2006; Le, Venkatesh, & Nguyen, Knowledge has typically been measured in 2006). This is particularly true in emerging economies terms of R&D, human capital, and patented inventions. because such resources are severely constrained. For Many scholars have predicted that the emergence of example, capital markets, venture capital, and angel knowledge as an important determinant of growth and investors are typically at nascent stages of competitiveness in global markets would render self- development. As such, bank loans tend to be the only employment and small firms even more futile. Despite significant formal sources of external funding for private these forces, small and young firms have returned as small and medium-sized enterprises (SMEs) in the engine of economic and social development in emerging economies. Therefore, a key challenge
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