Increased Rates of Unemployment and the Need for Entrepreneurship
With increased rates of unemployment in the world governments are encouraging citizens to venture into entrepreneurship instead of depending on the states to provide employment. Youths are among the most affected group when it comes to unemployment and government, and other stakeholders have encouraged the implementation of policies such as focusing on technical skills in the higher education institution and other learning centres. Lecturers and parents have been asked to support the youths on the need of starting their businesses which in turn helps create employment. Different courses are now offered in institutions of higher learning aimed at assisting students to improve their knowledge of different business-related areas. This annotated bibliography reviews four articles with the aim of answering the question, what are some of the factors that affect the entrepreneurship spirit since, despite the different initiatives introduced by states, not many countries have managed to attain their set targets.
Reasons for Small-Business Failure
Abdelsamad, M. H., " Kindling, A. T. (2001). Why small businesses fail. Advanced Management Journal, 43(2), 24-32.
Both authors have immense experience in the field of management which makes their work credible. Moustafa worked at Virginia Commonwealth University as a director of graduate studies and had held other senior management positions which makes him conversant with this area. Alexander, on the other hand, was the president of the Automatic Manufacturing Company. In their article, they state that starting one's business venture is appealing, but most of these businesses fail over time. They cited that the main reasons for this trend were incompetence and inexperienced nature of business owners when it came to dealing with the numerous challenges they encountered (Abdelsamad " Kindling, 2001). They discuss in detail some of the reasons for small-business failure which include inadequate board, excessive optimism, inability to delegate, negligence in developing subordinates, excessive withdrawals, underestimating economic effects, and financial pitfalls among others. They conclude by saying that for these small businesses to be successful, all stakeholders need to understand the challenges they are likely to encounter and formulate strategies aimed at mitigating the pitfalls.
The Impact of Financial Background on Entrepreneurial Creativity
Melati, I. S., Arief, S., " Baswara, S. Y. (2018). Does financial background affect entrepreneur students 'creativity: an investigation of how rich and poor students start their businesses. Journal of Entrepreneurship Education, 21(1), 1-11.
All the authors work at the Universitas Negeri Semarang at the Department of Economic Education and have conducted numerous research making their work credible. In their journal, they state that the level of unemployment in Indonesia was at 7.02 million by August 2016 and out of this population 4.87% was composed of University graduates a fact that is similar to many countries (Melati, Arief, " Baswara, 2018). They go ahead to state that different factors affect entrepreneurship spirit such as creativity and access to finance. They mention that wealthy students easily start businesses due to the ease of access to funds and the wide variety of ventures to choose from. However, they say that poor students are more creative and quickly identify business opportunities, unlike affluent students who are absorbed in their family businesses. However, poor students are more risk-averse and possess lower self-esteem compared to rich students. They are also vulnerable to low self-confidence and depression preventing them from venturing into businesses. They, however, conclude that poor students are more persistent and perseverant to the challenges encountered when running enterprises compared to wealthy students.
Financing Challenges for Small- and Medium-Sized Enterprises (SMEs)
Wang, X., Hu, Y., Xia, X., " Deng, Y. (2014). Estimation of the Treatment Effects of Ownership on the Indirect Financing of Small- and Medium-Sized Enterprises. Discrete Dynamics in Nature and Society, 2014, 1-6. doi:10.1155/2014/453458.
All authors work in different universities in China in the departments of economics and management which makes their work credible. They mention that SME's are essential economic drivers of the Chinese and overall universal economy. They go ahead to state that despite their enormous economic contribution, financing these SME's is a huge challenge that is affecting most of these SME's a reason that has not only discouraged people from venturing into entrepreneurship but also led to their failure. They state that the US subprime crisis in 2008 affected many SME's a state that affected the world's economy. They suggest that the Chinese government should come up with policies aimed at supporting SME's growth and development by financing both state-owned and private-owned enterprises (Wang, Hu, Xia, " Deng, 2014). They mention that financing discrimination is a hindrance to the growth of SME's a state that significantly discourages many people from venturing into entrepreneurship. They suggest for the removal of financial barriers and improvement in financing efficiency in China will encourage the growth of SME's and eventually boost the country's economy.
Importance of Business Ethics in Business Growth
Shaw, W. H. (1996). Business ethics today: A survey. Journal of Business Ethics, 15(5), 489-500. doi:10.1007/bf00381925.
William Shawn is a professor and former chair of the Philosophy Department at San Jose State University and has authored numerous articles making his work credible. In this journal, he argues that business ethics is an important subject that should be offered in Universities to all students since it is a requirement for successful business growth. With the rate of unemployment, students are equipped with numerous skills that are essential in starting and running own business ventures. Ethical skills are a crucial requirement when running a business. Shaw argues that unlike in the past where business owners overlooked business ethics for profits, business-people nowadays are more concerned about issues such as CSR, environmental issues, and health issues among others due to the increased competition. Shaw advocates for the adoption of business ethics as an academic specialty in universities and other institutions. His work is vital in the current market where unemployment and competition rates are high. Investors should take up business ethic courses and units if they want to be successful in the competitive market.
Conclusion
From these journals, it is evident that the level of unemployment is high in many nations and government and over stakeholders are coming up with ideas and policies aimed at reducing unemployment rates. From the journals, entrepreneurship is one viable solution for addressing this universal problem. However, entrepreneurs face numerous challenges when starting and running their business with the main ones being financial constraints and increased competition. For effective business growth and continuity, investors should possess skills such as creativity, persistence, and business ethics among others. The government on the other hand should support such ventures by ensuring security, improving infrastructure, and enhancing easy access to finances. Young people should continue getting encouragement and motivation on how to start and run their business. They should be equipped with the skills and knowledge necessary to identify business opportunities, set up and run businesses effectively a move that will not only help reduce unemployment but also improve the universal GDP.
References
Abdelsamad, M. H., " Kindling, A. T. (2001). Why small businesses fail. Advanced Management Journal, 43(2), 24-32.
Melati, I. S., Arief, S., " Baswara, S. Y. (2018). Does financial background affect entrepreneur students ‘creativity: an investigation of how rich and poor students start their businesses. Journal of Entrepreneurship Education, 21(1), 1-11.
Shaw, W. H. (1996). Business ethics today: A survey. Journal of Business Ethics, 15(5), 489-500. doi:10.1007/bf00381925
Wang, X., Hu, Y., Xia, X., " Deng, Y. (2014). Estimation of the Treatment Effects of Ownership on the Indirect Financing of Small- and Medium-Sized Enterprises. Discrete Dynamics in Nature and Society, 2014, 1-6. doi:10.1155/2014/453458
