It is the law of nature that everything changes with time. Successful people are those who foresee it, prepare themselves and adapt to the situation. Entrepreneurship is no different. The world has progressed rapidly especially in the last 50 years and so is the meaning of entrepreneurship. What entrepreneurs think today would be very different from those in 1950s.
The concept of entrepreneurship has evolved dramatically over the past two centuries. The key fact remains same that entrepreneurship is on the rise. Let us examine the reasons for this surge and compare the ways that today’s entrepreneur think contrast to their predecessors.
Entrepreneurship – Defined
It was first introduced by French economist Richard Cantillon in 1723 and clearly defined by Jean Baptiste Say in 1803. According to Say, entrepreneur is an economic agent who,
- Utilizes means of production (land, labor, capital) to develop a product
- Sells his product to gain revenue which will cover cost of production and remaining will be profit
- Entrepreneur also develops means to increase his profits either by lessening cost of production or by relocating the means of production.
This definition though narrow but sounds familiar as costs cutting strategy or relocation of economic resources are commonly practiced by businesses today.
Today, entrepreneurship is defined by Howard Stevenson, a Harvard’s business Professor as,
“Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”
This means that an entrepreneur can identify a business opportunity even if he does not have means to achieve it. It is not about utilization of available resources to develop a product rather having a vision to produce something and then work for ways to obtain required resources.
Evolution of Entrepreneurship
Trade – Nearly 20,000 years ago, entrepreneurship started with trade. Goods were exchanged between humans for an overall benefit of tribe.
Agricultural revolution – With time, people learned to domesticate plants and animals. Group of people cultivate food and exchanged it with people who provided valuable goods.
New areas of specialization began to emerge such as Pottery, Carpentry, Wool-making and Masonry.
Expansion of trade routes – Cities started to appear from 2000 BCE. As population increased, people developed an idea that they can earn profits by trading between cities and cultures. Popular trade at that time was of salt, fruits, rice and paper making by China.
Invention of money – The key development in the history of entrepreneurship was shift from barter system to currency. Paper money acted as medium of exchange and provided a way to store value.
Beginning of the marketplace – Larger marketplaces became more popular to cater large population. Banking regulation became more advanced for small businesses and entrepreneurs could purchase goods from abroad.
Innovation, Mercantilism and Explorers was on the rise at that time. Luca Pacioli formulated standardized principles to keep track of a company’s accounts.
Machines and Industrial revolution – Shift from small scale to large scale production gave rise to some of the world’s great entrepreneurs such as J. Morgan and John D. Rockefeller.
Modern Entrepreneurship – Now-a-days entrepreneurship serves as lifeblood of all economies of the world. Entrepreneurs are encourages to innovate and are valued for their contribution in the economy.
Entrepreneurship in UAE
Global developments lead conservative countries to become more socially progressive and open to international trade. Particularly UAE which is ranked best for ‘ease of doing business’ in Middle East by World Bank Report. UAE provides best tax incentives to new startups. Free zones are formulated to promote foreign investment. The free zones have very open and business friendly policies. Overall, benefits for entrepreneurs have been startling in UAE.
Technological entrepreneurship has progressed rapidly in UAE. According to 2017 MENA Venture Report, tech companies in UAE made up 29% of new businesses. Even if a business is not a tech startup, it will utilize technological tools such as social media, apps and websites.
More than 60% of people in Middle East have access to internet. Technology has helped people access essential business knowledge and tools for their low cost startup which were not possible before.
Now-a-days we can see more women taking in charge of new startups. Global entrepreneurship research association has reported that there are now some countries such as Qatar where females have equal or higher entrepreneurship rates than men.
Entrepreneurship has also diversified in terms of age. Minority owned businesses are on the rise. Many new entrepreneurs are starting out at a young age.
3. Entrepreneurial Education
Entrepreneurship is a concept that can be learned. Universities in UUAE such as NYU Abu Dhabi and Dubai Entrepreneurs Academy offer courses on business and career development.
Those who cannot learn in universities can gain access to this information via internet such as free online courses and you tube videos. This is one of the main reasons that many entrepreneurs are starting out young.
Entrepreneurship has also evolved in terms of location. An entrepreneur can work from anywhere and with great speed; thanks to internet. Big companies are widening their workforce to take benefit out of small startups in developing nations. A study by Willlis Woers Watson; risk management and brokerage firm specified that 55% of multi-national companies are looking for ways to handle their workforce to use more external contractors for the next three years.
5. Ethical Entrepreneurship
There are people who are no longer profit driven- rather they want to build their corporate empire that is socially aware and returns something to society. They are called ethical entrepreneurs. An example would be of TOM, a shoe store which has a ‘one for one’ policy i.e. when you buy one pair of shoes, another one is donated to a person in need.
Future of Entrepreneurship
Entrepreneurship will continue to sustain its special position in society and economy. Over the year, only the means of entrepreneurship have evolved, not the core. Entrepreneurs address to demand by providing supply. They are the innovators who solve problems that no one has solved before.
Today’s global economy that provides state of the art infrastructure, communication systems, cheap labor and means of production has made modern entrepreneurship quite challenging but rewarding as well. Successful entrepreneurs will be the ones who have the ability to lead, solve problems, show creativity, move with the time and never give up.