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Entrepreneurship is considered to be the engine for society development
Through offering unique goods and services, entrepreneurs break away from tradition and reduce dependence on obsolete systems and technologies
Entrepreneurs regularly nurture ventures by other like-minded individuals
Entrepreneurs play a vital role in job creation and providing opportunities to young people. International annual Job Creation Survey consistently shows that entrepreneurs’ hiring plans outpace the rest. In 2015, it was found that 47% of entrepreneurs (and 77% of world-leading entrepreneurs) plan to increase the size of their workforce, compared to 29% of large corporations. As a result, supporting entrepreneurs to grow their businesses will have an impact on employment rates. In a survey, it was found that 65% of the 2,800 young people surveyed around the world want to run their own business at some point in their careers – 27% want to do so immediately and 38% after learning from someone else first. These ambitions are particularly strong in developing markets, with Mexico (91%) and China (89%) leading the way.
Scientific research carried out by the writer in his Doctoral study titled
“Transformation of Retired Military Personnel into Economic Actors through Entrepreneurship as a Post Military Career Choice : THE CASE OF SRI LANKA ARMY” using 1,450 retired Army soldiers (veterans) using proportionate and disproportionate stratified random sampling techniques found that 62.2% veterans aspire to be Entrepreneurs, whereas 27.6% do not prefer to be the same, 11.2% remained neutral. A majority number of veterans prefer to be Entrepreneurs in their second career due to possible prospects to overcome economic hardships.
In the year 1977 the private sector was made the “engine of growth” and it was given the authority and precedence to drive the country’s economic growth. This was a transfer from public entrepreneurship to private entrepreneurship in Sri Lanka to develop the country. Therefore, the country must try to see new boulevards to develop the country through private entrepreneurship not only because it is the “engine of growth”, but also to align the country’s development process to world inclinations.
The way forward should be to establish Entrepreneurship Development policies and institutions from the government, that focuses on harnessing the power of the youth and empowering them with the tools and means to venture out
UNEMPLOYMENT
Unemployment is defined as a situation where someone of working age is not able to get a job but would like to be in full-time employment. However, if a mother left work to bring up a child or if someone went into higher education, they are not working but would not be a classed as unemployed as they are not actively seeking employment.
Unemployment has been an issue in Sri Lanka for long and many governments have tried to solve this issue by taking many strategic initiatives. Sri Lanka has faced several internal conflicts due to economic problems, unemployment and sporadic youth unrest. According to the view of sociologists, anthropologists and intellectuals, the internal conflicts faced by Sri Lanka for 30 years and the 1971 and 1989 insurrections were manifestations of such issues. Therefore, Sri Lanka needs a rigorous and sustainable solution for unemployment for her to achieve the set development goals.
It is also evident that the female unemployment rate is higher than the male unemployment rate. Therefore, the country must take some action to create more opportunities for them to align with the global trend of ensuring the equal rights of women. At present, the enigma is “how to do it?”. However, in the future, there will be more unemployment and unrest among the youth. Therefore, the country must look to new ways and means to create new jobs for youth or any other opportunities with which occupy themselves and earn money for their living.
Entrepreneur
The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who organises, manages and assumes the risks of a business or enterprise. The word entrepreneur originates from the French language “entreprendre”, which means “to undertake”. Originally, it was meant an organiser of musical or other entertainments. In a business context, it means to start a business. The evolution of the term “entrepreneur” dates back to many centuries.
According to (Schumpeter, 1939) entrepreneurs are individuals who develop businesses by bringing innovation to market and entrepreneurship as how new market offerings cause creative destruction by facilitating innovators to gain competitive advantage on the market. Entrepreneurs have increasingly secured high recognition as the real people behind the economic growth and development. Further, as an academic, discipline entrepreneurship today is one of the most welcomed and respected hot areas by academic institutions including most Universities and business Colleges. The recognition of the field of discipline is such that an assortment of academic work has been in high current at any corner of the world today facilitating almost all to have easy access. An Entrepreneur is a person who affects Inventiveness by organising a venture with the view of obtaining economic and opportunity gain. He is a decision-maker and he decides what goods or services are manufactured, how it is done and how much they are done. The entrepreneur is the exclusive owner or at times a collaborator or the one with the majority of shares in an incorporated business enterprise usually administers and manages the business activities.
New products and services created by entrepreneurs can produce a cascading effect, where it stimulates related businesses or sectors that need to support the new venture, furthering economic development
ENTREPRENEURSHIP
Entrepreneurship is considered to be the engine for society development. Over a period of time the consideration of meaning to the term entrepreneurship has been changed with the development of the world, inventions and information technology. Thereby, today’s view on entrepreneurship is different from the earlier notion of entrepreneurship. It is an applied trade rather than academic discipline which could be easily adopted by anyone who could not succeed in education and become businessmen.
The business dictionary defines the term entrepreneur as an individual with the capacity and willingness to develop, organise and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses. In economics, entrepreneurship combined with land, labour, natural resources and capital can produce a profit. The Entrepreneurial spirit is characterized by innovation and risk-taking and is an essential part of a nation’s ability to succeed in an ever-changing and increasingly competitive global market place.
Why Entrepreneurship Is Important to the Economy
Entrepreneurs are frequently thought of as national assets to be cultivated, motivated and remunerated to the greatest possible extent. Great entrepreneurs have the ability to change the way we live and work. If successful, their innovations may improve standards of living and in addition to creating wealth with entrepreneurial ventures, they also create jobs and contribute to a growing economy. Entrepreneurship is thus important for a number of reasons, from promoting social change to driving innovation.
ENTREPRENEURS SPUR ECONOMIC GROWTH
New products and services created by entrepreneurs can produce a cascading effect, where it stimulates related businesses or sectors that need to support the new venture, furthering economic development.
For example, a few information technology companies made up the IT industry in India during the 1990s. The industry quickly expanded and many other sectors benefited from it. Businesses in associated industries—such as call centre operations, network maintenance companies, and hardware providers—flourished.
Education and training institutes nurtured a new class of IT workers who were offered better, high-paying jobs. Infrastructure development organisations and even real estate companies capitalized on this growth as workers migrated to cities where employment was growing.
Similarly, future development efforts in underdeveloped countries require robust logistics support, capital investments and a qualified workforce. From the highly qualified programmer to the construction worker, entrepreneurship benefits a large part of the economy.
ENTREPRENEURS ADD TO NATIONAL INCOME
Entrepreneurial ventures help generate new wealth. Existing businesses may remain confined to existing markets and may hit the glass ceiling in terms of income. New and improved products, services or technology from entrepreneurs enable new markets to be developed and new wealth to be created.
Additionally, increased employment and higher earnings contribute to better national income in the form of higher tax revenue and higher government spending. This revenue can be used by the government to invest in other, struggling sectors and human capital. Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain workers.
ENTREPRENEURS CREATE SOCIAL CHANGE
Through offering unique goods and services, entrepreneurs break away from tradition and reduce dependence on obsolete systems and technologies. This results in an improved quality of life, improved morale and greater economic freedom.
For example, the water supply in a water-scarce region will, at times, forces people to stop working to collect water. This will impact their business, productivity, and income. Imagine an innovative and automatic pump that can fill people’s water containers automatically. This type of innovation ensures people are able to focus on their jobs without worrying about a basic necessity like water. More time to devote to work translates to economic growth.
For a more contemporary example, smartphones and apps have revolutionized work and play across the globe. Smartphones are not exclusive to wealthy countries or people. As the growth of the smartphone market continues, technological entrepreneurship can have a profound, long-lasting impact on the world.
Moreover, the globalization of technology means entrepreneurs in lesser-developed countries have access to the same tools as their counterparts in richer countries. They also have the advantage of a lower cost of living, so a young entrepreneur from an underdeveloped country can compete with a multi-million-dollar existing product from a developed country.
COMMUNITY DEVELOPMENT
Entrepreneurs regularly nurture ventures by other like-minded individuals. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.
Some famous entrepreneurs, such as Bill Gates, have used their money to finance good causes, from education to public health. The qualities that make one an entrepreneur are the same qualities that help motivate entrepreneurs to pay it forward.
ENTREPRENEURS OPEN DOORS TO NEW VENTURES
Entrepreneurship is our greatest weapon to counteract this issue and to empower our youth. Youth by default are energized and empowered, they are willing to explore new territories and take up new challenges and risks. While working as an entrepreneur, an individual gets to work on multiple things, juggle different roles and turn them into better leaders and better individuals. Put aside the fact that Entrepreneurship brings big money from investors and even foreign clients, it also has a key role to play in building a character.
When battling unemployment, entrepreneurship is a solution, entrepreneurs open doors to new ventures, new business, new alliances etc. When an investor puts money into a startup or a venture, the entrepreneur automatically gets to expand its team to scale the venture and hence providing employment to more people. These days entrepreneurs are willing to hire to even resources who do not have formal education or a degree but have the right attitude, skill set and willingness to learn, which is a big shift in the thought process in comparison to corporate or big companies who are adamant on hiring from League colleges or shortlist candidates on the basis of qualifications not capabilities.
The way forward should be to establish Entrepreneurship Development policies and institutions from the government, that focuses on harnessing the power of the youth and empowering them with the tools and means to venture out. Off course not all ventures will take off and few will have to come across failures often, the policies should be planned in a way to cover that and promote a risk-free innovative environment for entrepreneurs to flourish.
ENTREPRENEURSHIP IS NOT MONEY DRIVEN- BUT PASSION DRIVEN
Entrepreneurship is not money-driven venture but a passion-driven one that facilitates positive change in the society. The role of the government in entrepreneurship should be that of a facilitator and not a controller. The tremendous impact of the internet in business, which has obliterated geographical barriers, has made the business a lucrative career option. Many young minds now understand the importance of looking at a steady business growth, forming the right team and empowering it to bring about that growth. Targeting rural areas and tier 2-3 cities with better product and services is the way forward for entrepreneurs as there is already saturation in metros and big cities. Industry experts say any business that adds value to the quality of the life of youth will see growth. Startups have the opportunity to grow and become big. Keep challenging yourself and keep pushing yourself.
WAR ON TERRORISM HAD AN ADVERSE IMPACT ON THE ECONOMY AND ENTREPRENEURIAL OPPORTUNITIES
The war against terrorism in Sri Lanka had an adverse impact on the economy of the country. Although, doors were opened for foreign investment in the country with the introduction of free economic policies in the late 1970s, the country was not able to yield foreign investment as expected due to uncertainties created in the political climate in Sri Lanka by political riots and the ethnocentric conflict that gathered momentum with the unfortunate events in July 1983 where, thirteen Sri Lankan Army soldiers were killed by terrorists in the North. This adverse environment became the main deterrent to foreign investment which was expected to act as a catalyst to the economic growth process of the country. During the same period, two major multinational electronics companies, Motorola and Harris Corporation were due to establish plants in the Export Processing Zone with an initial employment capacity of 1,850 workers. However, it did not materialise due to the above-mentioned reason. This had a negative impact on the anticipated big leap forward and possible investments of other large multinational companies in Sri Lanka result in a loss of Entrepreneurial opportunities.
POLICYMAKERS MUST PAY SIGNIFICANT ATTENTION IN ENTREPRENEURSHIP
Entrepreneurship is a key factor for economic development. Public, private and non-governmental organisations take various measures to promote entrepreneurship in different countries. Universities and colleges throughout the world have implemented various Postgraduate, Undergraduate and Diploma courses on small business management and entrepreneurship. In a developing country like Sri Lanka, the role of entrepreneurship development is more important than that in developed countries as far as the creation of self-employment opportunities and reduction of unemployment situations are concerned. After the independence in 1948, each successive Government of Sri Lanka has followed two different ideologies: one that believed in the free economic system and the other that believed in a relatively controlled economy. However, in the present context, the Sri Lankan economy seems to be moving more towards the free enterprising system with the emergence of the industrial and service sectors over the traditional agricultural sector.
Further, Sri Lanka does not abundantly engage in entrepreneurial researches compared to other countries though, it experiences a rising concern in entrepreneurship fields by academic scholars, policymakers and business experts. According to the World Bank report (2008), starting and running business in Sri Lanka is not easy. The ease of doing business index ranks economies from 1 to 178and Sri Lanka has been ranked as 101. For starting a business in Sri Lanka, an entrepreneur has to take five procedures and 39 days and it costs 8.5 times the annual income per capita. In addition to that, Sri Lankan entrepreneurs have to go through 22 procedures and 214 days to deal with required licenses.
The Sri Lankan education system which mainly aims to prepare students for government employment is encouraged by this writer to popularize entrepreneurial exposure through the curriculum to engage in self-employment.As Sri Lankan society has not yet shown a positive attitude towards entrepreneurship, the researcher suggests that educators, policymakers, and others who wish to enhance entrepreneurial activity should focus first on developing selected personality characteristics among the potential entrepreneurs.
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Sri Lanka must develop an entrepreneurial culture to achieve suitable development
The year 2010 was a milestone in Sri Lankan history to achieve the developmental goals when Fox Business rated Sri Lanka as the best performing global economy. After the effective end of the internal conflict in 2010 in Sri Lanka, the environment was peaceful for business and investments throughout the country amid simple political issues prevailing in the country. Sri Lanka has come to a middle-income country during the last few years and the government has planned to transform Sri Lanka into a strategically important economic centre by developing five strategic hubs; a knowledge hub, a commercial hub, a naval and maritime hub, an aviation hub, and an energy hub taking the advantage of Sri Lanka’s strategic location and Consequent to the regime change in 2015, Yahapalana Government couldn’t keep the track to achieve economic development and Sri Lanka missed a golden opportunity.
According to the 2012 population census by the Department of Census and Statistics of Sri Lanka, the total population of the country was 20,359,439. The total number of establishments in the country was about 131,387 according to the 2003/2004 census of industries. Thus, the entrepreneur as per the percentage of the population in a country is less than 1% based on the available information.
However, this figure is relatively very high in some developing countries viz Chile 11%, Botswana 11.1%, Jamaica 11.9%, Angola 12.4%, Vietnam 13.3%, Cameroon 13.7% Brazil 13.8%, Thailand 16.7% and Uganda 28.1%. Thus, the percentage of entrepreneurs in Sri Lanka is very low when compared to some developing countries.
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Sri Lanka introduced the open economic policy in the year 1977 before many other countries in Asia to align her economy to world economic trends and to earn a higher economic growth whilst using innovations and new product developments along with the development of new services.
According to Dr T. R. Perera, the inward-looking economic policy practiced before 1977 promoted many indigenous businesses since the Government promoted local businesses by giving many incentives and subsidies to them. However, after 1977 due to open economic policy, indigenous businesses had to compete with foreign products, processes, technology, services, innovations and businesses. Hence, doing businesses in this context was very complex as well as more dynamic than in the past. Therefore, currently, Sri Lanka is in such a situation of complexity and a dynamic environment in all what she does. In the year 1977, the private sector was made the “engine of growth” and it was given the authority and precedence to drive the country’s economic growth. This was a transfer from public entrepreneurship to private entrepreneurship in Sri Lanka to develop the country. Therefore, the country must try to see new boulevards to develop the country through private entrepreneurship not only because it is the “engine of growth”, but also to align the country’s development process to world inclinations.
EASE OF DOING BUSINESS IN SRI LANKA -2010
When it comes to Sri Lanka ease of doing business can be seen by taking some criteria into consideration as table 01 Ease of Doing Business in Sri Lanka in 2010. Table 01 has compared nine factors with Singapore as a developed country and Chad as an underdeveloped country. According to it, certain indicators are better in Sri Lanka for starting a business. However, needs improvements to encourage Entrepreneurs.
SRI LANKA TO FOLLOW USA ENTREPRENEURIAL CULTURE
According to Insider UK (http://uk.businessinsider.com/); United States is the best country to be an entrepreneur and also it has the highest level of entrepreneurial culture as well. Therefore, Sri Lanka can look at such developed countries and use their experiences in the endeavour to developing an entrepreneurial culture to achieve the set developmental goals of the country.
Developing an entrepreneurial culture will be the strategy which gives a competitive advantage in achieving the development of the country. South Asian countries have not developed entrepreneurial cultures yet. They have a long way to go to achieve it. Therefore, Sri Lanka can make use of this gap and utilize it for the benefit of the country to achieve much-needed development.
Once the entrepreneurial culture is developed, it is easy for prospective businessmen and the investors to start and run businesses in Sri Lanka as it will be an attractive incentive for them. Hence, Sri Lanka must develop an entrepreneurial culture which is part and parcel of this life of the people in the country. At the same time, to empower women, minorities and underprivileged groups of the country, it is a burning necessity to create an entrepreneurial culture to face issues related to youth unrest and unemployment in the country.
CREATING BUSINESSES AND DEVELOPING ENTREPRENEURIAL CULTURE
It is evident that in Sri Lanka, there is a high unemployment rate amongst the educated than the uneducated in general. At the same time the female educated have higher unemployment than the male educated too. Therefore, the country needs to understand a correction course to it as well to prevent the issues faced in the past and to face the future strongly. Thus, what must Sri Lanka do as a country now? Creating businesses and developing an entrepreneurial culture will be a solution as well as imperative. In the future, there will not be many employees in organisations since technological advancements and digitization is happening all over the world affecting businesses and development of other countries as well.
Record-breaking eight million students have graduated from Chinese universities in 2017. This figure was nearly 10 times higher than it was in 1997 and in more than double the number of students in the USA. This figure is more than one-third of our population. Can China provide eight million Public/ private sector jobs annually?
In Sri Lanka, in one hand, out of 220,000 students who sit for the A/L examination, 23,000 become eligible to enter university. In the other hand, the number of unemployed graduates in the island is 58,812 which would grow further. Can any government provide Government jobs to above unemployed youth?
Interesting, SLPP Presidential candidate Mr Gotabaya Rajapaksa stated that
“everyone is talking about the number of jobs given but none is talking about how many jobs created”.
WHAT SRI LANKA MUST DO
Sri Lanka should plan a sound, sustainable and rapid growth. Nevertheless, the unemployment issue resulted from economic system reform, industrial structure adjustment and technological innovations, remains a strenuous, arduous and pressing task for the government. Therefore, the government must attach great importance to the issue of and takes unemployment as the first priority of people’s livelihood and as the top strategy for ensuring the stability of its society. Proceeding from the national experiences in its practice, gradually improves its relevant legal system, and formulate and implement a set of employment policies. The government adheres to promote employment through developing national economy, adjusting industrial structure, furthering the reform on its political and economic system, harmonizing economic development between urban and rural areas and improving social security system. Government should adopt effective measures and do everything possible to increase job opportunities whilst creating conducive environment for entrepreneurs who are the key players in creating jobs. As a country, Sri Lanka must try to promote entrepreneurship through the development of an “entrepreneurial culture”, thus developing Sri Lanka as a great developed nation physically and spiritually. In this endeavour, creativity and innovation will play a vital role to achieve the development goals of the country with a competitive advantage over other countries.
In my opinion, creation of a employment self or paid can be considered as giving everything to a person because the problem of housing, education of children, health and all the basic needs of the family unit can be either fulfilled or mitigated through one’s employment. Provision of Samurdi or Janasaviya or free food culture in the long run won’t take the country anywhere towards development and that is why we are still a developing nation for the last 72 years since independence.
Having saying so, the writer would like to suggest to the incoming Government to pay a significant attention in identifying and implementing the entrepreneurial path as a key solution to the country’s unemployment and development.
Writer is the former Security Forces Commander (Wanni Region), the Competent Authority for internally displaced Personnel in North, The Colonel Commandant of the Sri Lanka Sinha Regiment, World top ten in National Defence Studies (China), A Doctor in Economics and the Architect of Wanni Bogaswewa settlement with 36 years of Active military Service and presently working as an International writer and International Researcher. Writer’s PhD is on Veteran Entrepreneurship.
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