Italian SME Default Prediction via ANN

This assignment, derived from a study published in the Journal of Small Business Management, focuses on predicting defaults among Italian small and medium-sized enterprises (SMEs) using Artificial Neural Networks. Students are required to understand the data provided, preprocess it if necessary, build an ANN model for prediction, train and validate the model, and evaluate its performance. The goal is to identify key factors influencing SME default risks and develop a predictive model with high accuracy.

ESBM project

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1 Types of entrepreneurial ventures and their relationship with typologies of entrepreneurs.1
P.2 Similarities and difference between entrepreneurial ventures..............................................2
P.3 Impact of small business on the economy............................................................................4
P.4 Importance of small businesses and business start-
ups to the growth of the social economy....................................................................................6
TASK 2............................................................................................................................................7
P.5 Determine the characteristic traits and skills of Thomas Eddison and differentiate from
other business managers..............................................................................................................7
P.6 Thomson Edison reflect his personality and motivation or Mindset....................................9
P. 7 Examining background and experience that hinder or foster entrepreneurship................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurship is the method of launching, designing and running a new business,
which is more frequently than not, initially a business, offering a product, service for sale or hire
or process. According to the concept, this assignment will cover the aspects of entrepreneur and
entrepreneurship (Carter, 2018). Several types of entrepreneurial organisation will be discovered
and their state with categorization of entrepreneur will be evaluated in this report. Moreover,
taking the help of statistics and data, outcome of mini and small structure will be assessed on the
economy of united kingdom in this report. In this report, characteristic, traits and skills of
successful entrepreneur will be analysed and how they reflect on their personality will be
assessed in this report. Yet, helping in investigation, this report will aim to assess the experience
and background of successful entrepreneur.
TASK 1
P.1 Types of entrepreneurial ventures and their relationship with typologies of entrepreneurs
In business or enterprise, the person entrepreneur is playing a role of who organises,
assumes and manages the risk of an organisation. Nowadays, in a national economy the
entrepreneur is playing an important part of growth and development. Entrepreneurial
categorisation like every other typology is a classification scheme. There are several ways of
entrepreneur which are determined as female, male, social entrepreneur and serial. There are
several small and large business administration who in-corporate their business activities
efficiently and effectively. In this report, the entrepreneurial ventures and their relationship with
typologies of entrepreneur are given as follows:
Small Business Entrepreneurial Venture: in the small business entrepreneurial ventures
determined the small or mini scale industry which is considering to be target minimum range of
customers and limited paid up capital. The different types of things are including such as store,
book shops, groceries, and electronic shops, etc. in the mini and small scale business are mainly
considered to be male and female workers who can do work positively in national economy in
efficiently and effectively (Cowling, 2018). Moreover, in united kingdom organisation are highly
affected by the national economy of the business ventures is in corpora ting in the nation are
medium and small scale organisation. Thus in last, concluded that small and medium scale
organisation are very basically for the national economy of the country.
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Scalable Start-up Entrepreneurship Ventures: in the market, a kind of entrepreneurial
venture is newly emerged. To fulfil the customer choice and provide their needs by effectively
quality of goods and services to the customers are motive in nature such as scalable start-up
entrepreneurship ventures (Cunningham, 2017). The main aim of scalable business organisation
is to determined their growth and development by which we offering several products and
services to the users. Different types of entrepreneur dealing with scalable start up organisation
are serial entrepreneur. The entrepreneur who is coming continuous in nature is coming with
unique ideas to start a new venture. This organisation impact on the national economy of united
kingdom effectively as, there are several new start up that incorporating in the country
efficiently.
Large Organisation and ventures: as overall study and compare that large organisation
are opposite of small ventures. They are targetting a large sector of customers and paid up capital
is more. In this having a different type of entrepreneurial ventures whose motive is to earn profit
and create more income by supplying goods and services in a large segment of customers
efficiently and effectively. For example, Aldi, Tesco are some of large ventures incorporating in
united kingdom. Furthermore, in order to sustain the market economy the life cycle of the
products is limited and management needs to focus on continuous improvement and innovates a
new product. Large scale ventures have to focus on continuous innovation in order to sustain in
the competitive environment.
Social Entrepreneurial Ventures: the social entrepreneur are considered to be innovators
who focus on creating products and services that solving the problem and the social needs of the
users. To make a world better in place the unlike scalable entrepreneur is start ups their goal. Not
to take or create market share in wealth for the founders. It may be hybrid, profit, non profit,.
Maintaining the benefits of the company and national economy they offering a goods products
and services (Henrekson, 2017). This organisation contribute in increasing the country image and
goodwill efficiently and effectively in the nature. Social Entrepreneurial ventures are operated by
social entrepreneurs who have motive to serve the societies and communities by providing them
services that enhances the welfare of the society.
P.2 Similarities and difference between entrepreneurial ventures
Entrepreneurial ventures are similar and different from each other. There are four types of
entrepreneurial ventures which has been discussed above. In this section, the difference and
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similarities between different types of entrepreneurial ventures will be discussed. In this context,
the similarities and difference between different types of ventures are described below:
Similarities
Small Scale enterprises Large Scale enterprises
 These ventures are similar to the large
scale and scalable entrepreneurial
ventures in terms of motives and
purposes. The motive of these ventures
is to earn profits by providing products
and services to target customers.
 These ventures are similar to large
scale organisations in respect of
products and services provided by
them. They provide products to specific
group of customers in order to earn
higher profits and revenue.
 These ventures are similar to small
scale organisations in terms of their
purpose, goals and objectives. The goal
of these organisations is to earn profits
and revenue to sustain in competitive
environment.
 These ventures are similar to scalable
ventures as they have to work on
continuous improvements and
innovation to provide customers with
unique and upgraded products.
Scalable Enterprises Social Enterprises
 Scalable enterprises are similar to
social enterprises as they work for
common purpose and motives.
 These enterprises are similar to small
scale enterprises in the way of doing
business activities and operations.
 Social enterprises are similar to scalable
organisations in terms of innovation
and development of services in order to
provide quality services to the society.
 Social enterprises are similar to large
scale organisations in terms of motive
which is to serve society by providing
them effective quality of services.
Differences
Small Scale enterprises Large Scale enterprises
 Small scale enterprises are different  These organisations are different from
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from large scale organisations in terms
of customer base, production rates,
capital and profitability. These
organisations operate in smaller market
economy by providing limited and
segmented customers (Kim, 2017).
 These enterprises different from social
and scalable enterprises in terms of
production of goods and services.
all the entrepreneurial ventures in terms
of size, scope, profits and capital.
 Large scale organisations are different
from social and scalable organisations
in terms of motives and purpose. They
have different aim and objectives on
which they work on.
Scalable Enterprises Social Enterprises
 Scalable enterprises are different from
social enterprises in terms of motives
and purpose. They have motive to
provide innovative and quality products
which no other organisation has
targeted on.
 Scalable enterprises are different from
other organisations like large scale
enterprises in terms of providing
different products and services to the
customers.
 Social enterprises are very different
from all the entrepreneurial ventures
operating in United Kingdom. They
have motive to serve society without
considering about the profits.
 They have operated by social
entrepreneurs who have different
motive and purpose in life.
 Social enterprises are different from
scalable enterprises in terms of
providing products and services to
customers.
P.3 Impact of small business on the economy.
Small scale business are the backbone of United Kingdom. There is a great impact on the
economy of the country. Small scale businesses has large percentage on the growth and
development of economy of United Kingdom. The different kinds of small scale businesses are
as follows:
Economic Power- In UK there are numerous of small scale enterprises are operating in
the environment (Martin, 2018). The employee's in small scale business are in small number.
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The record stated that about 33% of people are working and around 20% of output is evaluated
by the employee's of small scale organization.
Micro and small enterprises are determined by-
Small enterprises- the employees are less than 50 employees and turnover is up to £12
million.
Micro enterprises- employees are less than 10 and output is about £2.5 million.
Medium Enterprises- the employees are less than 50 employees and the output is about
£52 million.
There are number of enterprises which are classified under into single proprietor and partnership.
The management and control in sole proprietor is operated by single person. The profit and
losses, risk factor all are born by the single person. But in partnership business the management
and control and profit and losses and risk factor is born by the partners. The division of their
profit is distributed equally or according to the partnership deed.
Small scale business not only increases the working capital of the country but it also compounds
to the GDP of the nation (Regmi, 2017). There are some applicable data and statists which help
in identifying the impact of small and tiny enterprises.
The total business in UK are £5.7 million and total small scale enterprises are £5.2
million in UK. The percentage of contribution from small scale industries is 94%. Thus, the
small and micro business are very crucial for the development and growth of the nation.
The total employed person in UK is £16 million and about £9.55 million of person are
employed by the small scale enterprises. The ratio of small scale enterprise in the contribution to
the economy of UK is 62%. Small scale endeavour not only plication the capital of the nation but
it also compounds to the GDP of United Kingdom. There are relevant data and statistics which
assist in analyse the impact of small and micro scale organization.
Macro environment ;
A macro environment is the status that exists in the economic system as a whole, rather
than in a peculiar sector or region. In general, the macro situation includes trends in gross
domestic merchandise, inflation, employ, disbursement, and medium of exchange and fiscal
policy. All such kind of factor is help to change condition of business environment. Entrepreneur
is a person who focus on macro environment factor and change them as per the need of market
condition.
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P.4 Importance of small businesses and business start-
ups to the growth of the social economy.
There are some factor is focus on small business and business start- up is help for social
economy condition. Small enterprise may not create as much money as large business firm, they
are a critical section of and major contributor to the posture of local efficiency. On the other
hand, some important factor are as follows :
 Increase Employment- Small scale project has great role in accelerative the employ in
United Kingdom (Lockyer, 2017). As from above statical data, it was analysed that much
than half of the employ is brought forth by Small, Medium and Micro endeavour which is
about 70%. On the other hand, accelerative in the globalisation, many group start their
own start up which decreased sizeable magnitude of state in the administrative district.
 Improve standard of living : It is help to improve standard of living of poor people.
Small scale task come up with new and advanced business concern which assist in
accelerative and up the power of acquisition. Many customized are draw toward the
prime and invention of the small endeavour. The role of little endeavour play is very
indispensable and significant. The part towards the growing and improvement of the
economic system.
 Innovation :- The commodity and employment of the small scale commercial enterprise
are highly advanced which pull many people. The new start up ever come up with
advanced and new thought. More over, with addition in business relation SSI centred on
non-stop introduce so that more and more than good and employment can be avail to
devour which lead to hike in the economic system of United kingdom as well addition
the buying power of user (Xiang, 2016). With help of innovation is increase the number
of customer in market place and increase profit.
 Commitment to national economy-From analysing the material factual information from
various sources, it was comprehended that little small scale and medium ventures
alongside fresh out of the box new initiation of undertaking contributes more to the
economy of United Kingdom. It was additionally broke down that More than half of
partaking in total national output was conceded by little and medium ventures.
Henceforth, it demonstrates that little and medium scale endeavour assumes essential part
in overhauling the economy of United Kingdom effectually and with productivity.
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 Creating compelling relationship-Small business make powerful association with clients,
providers and their labourers . For improvement and development of the independent
ventures, individual collaboration assumes viable part. SSI are more worry about the
desires for the customers.
 Appropriate usage of assets Small scale undertakings are much worry about its assets,
they even utilize their assets adequately and productively. As in light of the fact that it is
critical for Small scale undertakings to effective use of assets. Squandering of assets isn't
useful for the ventures.
 Face inconveniences and difficulties in much adaptable way-Small scale undertakings has
little chain of command. Independent company faces numerous issues and issues in the
activity of the business and they face every one of the difficulties in much intense way
and make modifications to tackle the issues and inconveniences. Vast undertaking are not
ready to roll out improvements quick as in the substantial activity it is hard method.
TASK 2
P.5 Determine the characteristic traits and skills of Thomas Eddison and differentiate from other
business managers.
The Thomas Edison is most famous person that are invented a light bulb, motion picture
camera and also improve the telephone. In the age of 84 year, he gets the success in his life and
they are very famous businessman as well. They are born in New Jersey and he is very Poor
student and their mother are very furious about the school and their teaching. He said that his
mother is very true and because of her they are becoming a successful person. They are making a
multiple project and dealing with telegraph.
The American company will introduce a new technology is called telegraph and Thomas
Edison can be improve the telegraph. It also established the new network and are developing the
different quality Telegraph. There are some skills and characteristics so that they are becoming
successful person. Thomas Edison is different for the other entrepreneur because they are totally
thought about in different ways and they are using new ideas. Thomas Edison is considered as
great entrepreneur and that invented so many things in his life. They are established their own
company to hire the talented person (Li, 2017). They will manage the whole management is a
very proper ways. They are developed many products in market and this is the great achievement
for the businessmen.
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Passionate:
This is the most important characteristic because they are putting their new ideas towards
the technology. The successful person always think about the beyond and this is quality that
they are achieved their goal. Thomas Edison is also very passionate about their work and they
always creating a new thing and achieving their goals.
Curious:
Thomas Edison is always curious about to the new technology and they are invented
many things like motion picture, light Bulb etc. They are understood the requirement of
technology. He is very intelligence person to take challenges in his life and their imagination
power is also very strong.
Analytical:
They are creating a new technology and they always focus on their targets and goals. This
is art to analysis the whole process (Mehtap, 2017). Thomas Edison is very creative person and
they always think about in different manner. They are putting new ideas that are helpful for the
business and he is becoming a very successful entrepreneur.
Open-minded:
They are always moving all around and identifying the actual requirement of the
technology. It applied the best approaches to create the new product that would be helpful for the
organization and personally (Axelsson, 2016). Thomas Edison is very open-minded person and
they always think about the new technology and innovation. They are always putting some extra
efforts to the increasing their quality of product. Open-minded person always searching a new
ideas and creating new things.
Fearlessness:
Most of the other successful person can be participate as a competitor because they
launched a new product in market. Other successful person like Steve Jobs, they always
inventing a new technology in the market. Thomas Edison always think about that the
opportunity are always moving all around the world and the most important thing to understand
the correct ideas adopt is the important thing. A successful person always using their own mind
in proper way. Edison is highly recognized the values of success and they are achieving their
goals.
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P.6 Thomson Edison reflect his personality and motivation or Mindset
Thomas Edison is a great man to always moving to right direction and they are using new
strategies for the business process. The actual required thing for business is Money, power, team
work etc. Entrepreneurs always think in different way and they have different Mindset. They are
always used new approach and can be applied in their innovation (Balqish, 2017). There are
classified the entrepreneur Mindset and their motivation as following: Scope out to consumer First: The entrepreneur can be focus on the customer satisfaction
and identifying the need of consumer. They are making a new approach and planning to
the new technology.In modern technology, the requirement of customer has been
changed so that the company will maintain the product detail and their services. They are
using new technology such as digital marketing with the help of these techniques can
easily explore their product in the new market and this is the best approaches. Finding the new market for Existing Product:The most important thing to determine the
new market strategies and they are using old product that are already available in market
but they adding some new features and ideas in an old product and then launch in market.
This is the best thing and Thomas Edison are used this type techniques (). For Example
Telegraph is already present in market but they are putting some effort to adding a new
feature. In this way, they are identifying the new customer demand and according to the
demand they are manufacturing the product. Build business Through the networking: Networking is very important for the business
because with the help of network they are expanding their business in all over world.
According to the Edison, they are always built their network to the investor and it is very
useful for the business purpose. This is basic need to expanding their branches in all over
the world. Networking is a power to identifying the right market value and it can be
developed a connection from one company to another. The investor provides funding to
the entrepreneur so that they are increasing their product values. Understand the power of brand: The brand of every company is very important because
the customer are interacted due to brand. This is the best way to more consumer are
linked to the company. The brand is very valuable for the company in which they provide
the product efficiency and give the assurance to the customer when the consumer buy an
effective product and these are reduced the time cost of product. They are providing the
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guaranty that the product is very specious and effective and most of the people are
attracted to the branding. Brand is determines the quality of product and services.
 Concentrate on profit/money: It is the main factor to person are motivated and their
mind set when they are always focused on to developed their business in all over the
world. They are innovative new ideas regarding their product and services. The great
Entrepreneur always focus on their profit and earning a lot of money. This the best way
to increase their services and trades (Manzoni, 2018). The main motivation to increase
their confidence level and they are always open-minded person.
P. 7 Examining background and experience that hinder or foster entrepreneurship
A successful entrepreneur facing a different type of problems, difficulties, and facing
some issues while working for accomplishing their goals and dreams. Heights of achieving is not
determining the successful entrepreneur by which it determined by failure. A Thomas Alva
Edison is most famous inventor in ancient time of period he utilizes various types of modern life
it invents a light bulb, motion picture and the photograph. As such as improvement in telephone
and telegraph. In his age 84 years, he acquired an unbelievable 1,093 patents. Apart from being
an inventor, he maintains and managed his becoming a successful entrepreneur and
manufacturer. His marketing inventory for the public also managed by him. He lived in new
jersey (Manzoni, 2018). Consider to his personal life so many changes occur in his life. The
personality of Thomas Edison is considered to be to help them to counter all the difficulties and
issues efficiently and effectively. There are so many methods and factors to influence the fosters
their growth and developing the efficiently and effectively. Such as factors included like family
support, skills, education, traits and knowledge. Behind his success a Thomas Edison partly
fosters and partly hinders for their development and growth. His family is too much supportive in
nature having positive impacts to complete and achieve their goals and targets rapidly.
Sometimes negative impact was occurred, like family problems and sometimes the became
furious and anxious for their work and concepts. Another, positive impact was that he never give
up ib his life to get succeed and his ideas to change organization.
Negative impacts always defeat in nature as compared to positive impact. While
changing and implementing the process (Manzoni, 2018). His success be never rejected by his
competitors to developing their own, various methods. At the age of his 12, he lost almost all his
hearing. Different types of methods and theories are caused due to his hearing loss. Thomas was
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a poor student. When he is in the school his principle called him “addled” his angered mother
take him back to home and teach him at home. In the history, he called by legends. His various
ideas and creative innovatory are become legendary. He failed frequently in his life to out stand
the success. He takes lots of effort to perfect and get succeed in his experiment. When he and his
friend worked for a devise a novel storage battery they didn't found a solution. Here a just a
couple of Edison's other non achievement people, which finally became footnotes of his wildly
successful career. When he neglects from further work on the phonograph others thinking to do
same work and improve and get achieve a new method.
In a business the dictation machine is initially known as phonograph. A myriad of
business liaisons, corporations and partnerships filled Thomas's life, and legal battles over
several patents and corporations were continuous. Occurring projects the brief sketch of an
enormously is active and complex life full of projects in the simultaneously in nature. He
establishes different types of books which are in libraries so another people can learn and know
about him how he work and done his business and get some knowledge to succeed in their life.
CONCLUSION
Form the above report is focus on entrepreneur and entrepreneurship. Several types of
entrepreneurial organisation will be discovered and their state with categorization of
entrepreneur will be evaluated in this report. As per the above report is focus on Small, Medium
and Micro endeavour which is about 70%. On the other hand, accelerative in the globalisation,
many group start their own start up which decreased sizeable magnitude of state in the
administrative district.
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REFERENCES
Books and Journals
Carter, S 2018. Barriers to ethnic minority and women’s enterprise: Existing evidence, policy
tensions and unsettled questions. International Small Business Journal. 33(1). pp.49-69.
Ciampi, F 2018. Small enterprise default prediction modeling through artificial neural networks:
An empirical analysis of Italian small enterprises. Journal of Small Business
Management. 51(1). pp.23-45.
Cowling, M 2018. What really happens to small and medium-sized enterprises in a global
economic recession? UK evidence on sales and job dynamics. International Small
Business Journal. 33(5). pp.488-513.
Cunningham, T 2017. Better understanding the small business construct to advance research on
delivering workplace health and safety. Small Enterprise Research. 21(2), pp.
Henrekson, M 2017. Small business activity does not measure entrepreneurship. Proceedings of
the National Academy of Sciences. 111(5). pp.1760-1765.
Kim, H 2017. Building Web 2.0 enterprises: A study of small and medium enterprises in the
United States. International Small Business Journal. 31(2). pp.156-174.
Martin, S 2018, August. Empowering communities on line: A Massive Open Online Community
on App Development and Entrepreneurship. In Teaching, Assessment and Learning for
Engineering (TALE), 2013 IEEE International Conference on (pp. 37-40). IEEE.
Regmi, K.K., 2017. FUTURES OF FINNISH ENTREPRENEURSHIP: A study seeking
possible, preferable and probable futures for Finnish entrepreneurship.
Lockyer, J., 2017. Coventry University. In Entrepreneurship Centres (pp. 19-40). Springer
International Publishing.
Xiang, Y., 2016. On How Female Postgraduates See Entrepreneurship. Journal of College
Advisor. 3. p.012.
Li, Y 2017. Research about the Effection of Incubated Enterprises Business Network on the
Enterprise Performance.
Mehtap, S 2017. Encouraging female entrepreneurship in Jordan: environmental factors,
obstacles and challenges. In Entrepreneurship and Management in an Islamic
Context(pp. 207-225). Springer International Publishing.
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Axelsson, K., 2016, January. Strategizing in the Public Sector: Findings from Implementing a
Strategy of Entrepreneurship in Education. In International Conference on Enterprise
Marketing and Globalization (EMG). Proceedings (p. 68). Global Science and
Technology Forum.
Balqish, N 2017. The Human Capital Index Impact In Small And Medium Enterprise
Development: Case Study In Indonesia.
Manzoni, C 2018. Student entrepreneurship: the impact of the thesis supervisor on students'
entrepreneurial entry.
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