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7/24/2019 Lecture 2 - Economic Contributions by Entrepreneurs 07.01.2016
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Foundations of
Entrepreneurship
Economic contributions (and
other value creation) of anenterprise and entrepreneurs
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Books
Entrepreneurship by Robert D.Hisrich
Entrepreneurship: Theory,Process, and Practice 9th Editionby Donald F. Kuratko
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Economic contributions of anenterprise and entrepreneurs
How does an economy prosper?
hat roles do entrepreneurs play inecono!y"
Where does a government get the moneyfrom?
Ho# a nation creates #ealth"
What are roles of the corporate world inthe process of creation of wealth?
hat is e$ciency of !oney"
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
ltimate !b"ective of anEconomy
#o gain $Full employment% & there isenough overall demand in theeconomy for everyone who wants a
"ob to have one at the prevalentsalary'
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Wealth reation for the ation
%da! &!ith: The Wealth of Nations' Firstpublished in *++, - inspired by the industrialrevolution' the division of labour. productivity. and free markets
'ohn (aynard Keynes: The )eneral Theoryof E!ploy!ent, *nterest and (oney -published in *01, consumption function. the multiplier (* 2upee of
investment creates income of several 2upees). the
marginal e3ciency of capital. the principle of e4ectivedemand and li5uidity preference'
'oseph &chu!peter + reative 6estruction as away of innovation and entrepreneurship and economic
growth
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
7iterature 8ubstantiating Economic9rowth 6riven by Entrepreneurship
8tel :' v. ;' arree and 2' #hurik (). The eect ofentrepreneurial activity on national economic growth.8mall Business Economics. ol'
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
ountry E6B 9E A9 G78witerla
nd ++ ,0>+1* @+=1* *
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
orrelation oe3cients
Ease ofDoin-usiness
)lobalEnt. *nde
Per+/apita)DP
9lobalEntrepreneurshipndeK
0.1023
='====
Aer&apita 96A 0.3422 0.3334
='==== ='====
Guality of 7ife ndeK 0.3546 0.1733 0.3600
='==== ='==== ='====
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
LEase of 6oing BusinessM andL9lobal Entrepreneurship ndeKM
20
4
0
60
80
100
Glob
alEntrepreneurshipIndex
40 50 60 70 80 90Ease of oin! "usiness Index
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
L9lobal Entrepreneurship ndeKMand LAer&apita 96AM
0
20
40
60
80
G
lobalEntrepreneu
rship
Index
0 20000 40000 60000 80000#er $apital G#
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
L9lobal Entrepreneurship ndeKM andLGuality of 7ife ndeKM
0
20
40
60
80
G
lobalEntrepreneu
rship
Index
0 50 100 150 200%ualit& of 'ife Index
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
F d i f E h i
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
F d t i f E t h i
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Full Employment
httpNOOen'wikipedia'orgOwikiOFullPemployment
F d t i f E t h i
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
(onditionsdeQn
ingtheEntrepreneurialF
ramework
F d t i f E t h i
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Jeynesian Economics
onsumption function#otal consumption R :utonomous
consumption S nduced consumption
(ultiplier Arivate or government investments bring
cycle of spending that increasesemployment and prosperity' 2s' *== spentin labor cost of a pro"ect leads to 2s' =eKpenditure that leads to 2s' ,@ and so onleading up to aggregate 2s' >== or so'
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Jeynesian Economics
#he principle of e4ective demand andli5uidity preference'
8avingsonsumptionnterest rate
Employment increases with consumption' onsumption depends on savings' 8avings is inTuenced by interest rate
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
alue reation Arocess
2etaile
r/onsu!pti
on
6istributio
n hannel
;anufacturing
or
8ervice
ompany
Arimary
nputs
;akers
tilities
Proide rouhly
32 of the fund
Banks
and
Financial
nstitution
s
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
&ains #ith the -ankin&yste!
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
;alue %round a (anufacturin
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Purchasin Po#er of Rupee
EKchang
e 2ate
EKport
2epatriatio
n
FO2OF6
mport
;ovement of Foreign urrency
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
7/24/2019 Lecture 2 - Economic Contributions by Entrepreneurs 07.01.2016
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
8ources of 9overnment 2evenues
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
#aK omposition>@
8ervice #aK *.=.*@*
#aKes on #
)rand Total ?4,72,130
/o!position of Taes ncome #aK
Wealth #aK
ustoms
EKcise 6uties
8ervice #aK
#aKes on #
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
* ant you to appreciate thesini@cance of the follo#ins in
econo!ic deelop!ent:
onsumption
Employment
#echnology Aurchasing power of domestic
currency
2ead more onthis
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Role of *nnoation in&ti!ulatin Econo!y
#he key factor for increasingconsumption is employment thatagain is dependent on consumption'
ew products and e3cientmanufacturing processes tend tobreak the e5uilibrium and shift it to
new paradigm'
2ead more on
this
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Econo!ic /ontributions ofEntrepreneurs
Entrepreneurs
Bring about the economic value&cycle andsustain it'
ncrease government income resulting in highereKpenditure and more consumption'
9enerate employment'
Aromote savings'
ncrease consumption'
8timulate new demand by o4ering products ofhigher esteem'
2ead more on
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
Econo!ic /ontributions ofEntrepreneurs contd..
mprove technological landscapethrough innovations in all key areas'
Facilitate di4usion of technologiesfrom abroad into domestic industriesresulting in technological self&reliance'
Bring foreign eKchange'
mprove 5uality of life'
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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p p
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F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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p p
F o u n d a t i o n s o f E n t r e p r e n e u r s h i p
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