Entrepreneurship and Development in the 21st Century

Bruno S. Sergi, Cole C. Scanlon

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781789732368, 9781789732344
• eBook ISBN: 9781789732351
• Topic: Business
• Subtopic: Business Development
• Index: Business

The 21st century has changed the face of entrepreneurship and development. Venture capital volume almost tripled since 2006 and concepts like microfinance have emerged and spread. Spurring the creation of new technologies and new jobs, the role of entrepreneurs now affects globalization and amplifies the dynamics of markets and economic growth.

Including a preface from Bill Drayton (CEO, Ashoka: Everyone a Changemaker), a cast of expert contributors explore how these new trends, along with a variety of political, cultural and social influences, have affected entrepreneurship. Entrepreneurship and Development in the 21st Century features a diverse array of chapters on subjects such as venture capital, cryptomarkets, and alternatives to fair trade. This work is the inaugural volume of a book series by the Lab for Entrepreneurship and Development (LEAD), a now-independent organization that first started at the Institute of Quantitative Social Sciences (IQSS) at Harvard University. 

Experienced editors Bruno S. Sergi and Cole C. Scanlon bring together a detailed exploration of the new face of 21st century entrepreneurship. Looking across cultures, countries and sectors, this is a vital read for any student or researcher of entrepreneurial development.

Chapter 1

Entrepreneurship and Economic Growth: The Experience of Developed and Developing Countries

Bruno S. Sergi, Elena G. Popkova, Aleksei V. Bogoviz and Julia V. Ragulina

Abstract

This chapter elaborates on entrepreneurship in developed and developing countries and focuses on the optimization of entrepreneurial activities. Various scenarios are considered: independent functioning of the market, integration in the form of reorganization (mergers and acquisitions), integration in the form of clustering, and integration in the form of innovational networks and technological parks. The optimal structure of the integration processes and best-case scenarios for its implementation to accelerate the rate and increase the quality of economic growth are substantiated. The potential for uptake of integration processes in stimulating economic growth through entrepreneurship is determined by the level of institutionalization in an economy. In developed countries, all forms of company integration are characterized by the high level of institutionalization, which allows for their effective use for economic growth. Independent companies, mergers, and acquisitions restrain economic growth and reduce its quality, while clusters, technological parks, and innovational networks accelerate the rate of economic growth and increase its quality. In developing countries, integration processes in entrepreneurship have a different influence on economic growth and require further institutionalization.

Keywords: integration; entrepreneurship; economy; optimization; development; growth

JEL classifications: M21; P13

1. Introduction

According to modern economic theory, growth is primarily driven by entrepreneurship. Entrepreneurship is one of the most dynamic phenomena in the economy, but it is subject to changes under the influence of globalization and crises in the global economic system. In the context of these changes, a new global tendency of entrepreneurship, related to the activation of its integration processes, has appeared. This tendency is caused by microeconomic motives, related to the unification of the market share of companies and strengthening of their common market positions, unification of resources of all types (financial, intellectual, and technological), and growth of their market power and the simplification of the promotion of their interests in relations with state regulators.

The macroeconomic consequences of the integration of entrepreneurship remain poorly studied. Given the vital role of entrepreneurship in economic growth, our interest is to study the influence of integration processes on entrepreneurship and determine the influence that integration processes have on economic growth and how to optimize these processes. The framework hypothesis is that integration processes in entrepreneurship positively influence economic growth, accelerating its speed, and increasing its quality. However, depending on the current level of development of the economic system and the goals for its further growth, different models for the integration of entrepreneurship (mergers and acquisitions, clusters, technological parks, or innovational networks) are needed. Therefore, we model the influence of integration processes in modern entrepreneurship on economic growth in both developed and developing countries.

2. Literature Review

The notion and characteristics of economic growth through the prism of cyclical fluctuations in economic systems depending on the level and rate of the development of entrepreneurship are found in Amri (2017), Bogoviz (2018), Bogoviz, Ragulina, Morozova, and Litvinova (2018), Bogoviz, Sozinova, and Ostrovskaya (2018), Doran, McCarthy, and O’Connor (2018), Khan and Hanif (2018), Popkova (2017), Popkova, Bogoviz, and Ragulina (2018), Popkova and Sukhodolov (2017), Srinita (2018), Bogoviz and Sergi (2018), Popkova, Popova, and Sergi (2018), Popkova, Bogoviz, Ragulina, and Alekseev (2018), and Popkova and Sergi (2018).

Applied issues of the economic growth of economic systems in developed countries, which emphasize its close connection to the development of entrepreneurship, are presented in Hajamini and Falahi (2018), Juknys, Liobikienė, and Dagiliūtė (2018), and Solé, Ríos, and Perdiguer (2015). The specific issues affecting economic growth in developing countries are analyzed in Abdouli and Hammami (2018), Chakamera and Alagidede (2018), Couharde and Generoso (2017), Darku and Yeboah (2018), Kaliappan, Ahmad, and Ismail (2017), Mahmoodi and Mahmoodi (2018), Nagano (2018), Ochoa-Jimenez, Moreno-Hurtado, and Ochoa-Moreno (2018), Omri, Ben Mabrouk, and Sassi-Tmar (2015), Zahonogo (2018), Biltagy, Mahrous, Said, and Kamel (2017), Feki and Mnif (2016), Figueroa-Armijos and Johnson (2016), González-Pernía and Peña-Legazkue (2015), Naanwaab and Edwards (2017), and Ostapenko (2015).

The value of integration processes on the development of modern entrepreneurship are found in Belouettar et al. (2018), Berthet and Hickey (2018), Bonaime, Gulen, and Ion (2018), Elvekrok, Veflen, Nilsen, and Gausdal (2018), Høegh-Guldberg, Eide, Trengereid, and Hjemdahl (2018), Huggins, Waite, and Munday (2018), Najafi-Tavani, Najafi-Tavani, Naudé, Oghazi, and Zeynaloo (2018), Olcay and Bulu (2016), Özaygen and Balagué (2018), Ping, Qin, Xu, Miyajima, and Kazuya (2018), Silva and Guerrini (2018), Stukalo and Simakhova (2018), Yan (2018a, 2018b), Zhang, Sun, Liu, Zhou, and Zhang (2018), and Zhang, Wang, Li, Chen, and Wang (2018).

The integration processes affecting entrepreneurship in developed countries are analyzed by Liu, Öberg, Tarba, and Xing (2018) and Tyurina, Neverov, & Ulyanychev (2017). The integration processes of entrepreneurship in developing countries are studied by Chalencon and Mayrhofer (2018), Link and Yang (2018), Park (2016), Popkova, Shakhovskaya, Abramov, and Natsubidze (2016), Popkova et al. (2017), Pozdnyakova, Popkova, Kuzlaeva, Lisova, and Saveleva (2017), Yan (2018a, 2018b), Zhang, Sun et al. (2018), and Zhang, Wang et al. (2018). The general findings are that developed countries are typified by low economic growth rates but have a high quality (intensive innovational development, strong sustainability, high levels of GDP per capita) of economic growth. Developing countries record high economic growth rates but have a low quality (poor innovational development, weak sustainability, low levels of GDP per capita) of economic growth.

3. Model

The content analysis allows us to distinguish two characteristics of economic growth:

• Rate – quantitative characteristics, which reflect the change of the level of development of the economy (GDP) over time. The higher the annual growth of GDP, the higher the rate of economic growth.
• Quality – qualitative characteristics, which show the reasons for and consequences of economic growth. The more that GDP growth is accompanied by the growth of public wellbeing (GDP per capita) and innovational development, the higher the quality of economic growth.

The optimization of economic growth under modern economic conditions envisages balancing the goals of accelerating the rate of growth while at the same time increasing the quality of economic growth depending on the opportunities and strategic priorities for the development of the economic system. The integration of companies is a process whereby they pool their resources and efforts. The integration of entrepreneurship is a process of developing sustainable interactions between entrepreneurial structures within a common union, which is a social formalized institute. Depending on the level of this unification and its goals, various forms of integration processes in entrepreneurship can be distinguished:

• Mergers or acquisitions: the full unification of two companies into one via reorganization, in order to achieve business goals (the strengthening of a market position, increasing competitiveness).
• Clusters (sectoral): the unification of companies that share an added value chain in order to maximize the effectiveness of the production (technologies, knowledge, and resources), marketing, and distribution (establishment of more reliable and profitable intermediary relationships, growth of c...

Table of contents

• Cover
• Title
• Introduction
• Chapter 1: Entrepreneurship and Economic Growth: The Experience of Developed and Developing Countries
• Chapter 2: Entrepreneurial Development and Business Innovation in the Democratic People’s Republic of Korea’s Financial Sector
• Chapter 3: A Proposed Framework on the Role of Entrepreneurial Education and Contextual Factors
• Chapter 4: Diné Entrepreneurship: Indigenous Contemporary Entrepreneurship
• Chapter 5: Value Chain Integration as an Alternative to Fair Trade for Chiapas Coffee Farmers
• Chapter 6: The Influence of Collectivism on Microfinance in Senegal
• Chapter 7: The Evolution of Financing Entrepreneurship
• Chapter 8: The Entrepreneurial Criminal: How Trust Coordinates Illicit Drug Cryptomarkets
• Chapter 9: AI Revolution: How Data Can Identify and Shape Consumer Behavior in Ecommerce
• Chapter 10: Calculating the Reputation of a Reviewer
• Index