Report on International Entrepreneurship and Economic Development

This report examines the crucial role of international entrepreneurship in driving economic development. It explores the expansion of businesses across borders, highlighting the benefits such as increased market share and profit maximization. The report delves into the differences between entrepreneurship and international entrepreneurship, emphasizing the latter's focus on innovation and global market entry. It analyzes various factors influencing international entrepreneurship, including resource availability, foreign trade conditions, human resources, technological advancements, and social-political factors. The report also identifies entrepreneurial opportunities in the international arena, such as high demand, lower investment costs, increased customer bases, higher revenues, and cheaper resources. Furthermore, it details the key roles of international entrepreneurs in wealth creation, job creation, balanced regional development, improved standards of living, and increased exports, providing a comprehensive understanding of its impact on global economies.

ASSIGNMENT 2

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
International entrepreneurship and economic development...................................................4
Entrepreneurial opportunities at international platform.........................................................5
Difference between entrepreneurship and international entrepreneurship.............................6
Roles of international entrepreneur in economic development..............................................7
Entrepreneurial entry into international business ..................................................................9
The issues that affects international entrepreneurship..........................................................12
CONCLUSION AND RECOMMENDATIONS..........................................................................13
REFERENCES..............................................................................................................................16

EXECUTIVE SUMMARY
The report comprises several roles and importance of international entrepreneurship in
economic development. The report ensures that the Development of international
entrepreneurship helps in improving the economy of the countries. The business is required to
conduct extensive research in order to understand the taste and preferences of the customers of
different country. Besides, the writing evaluates the difference between international
entrepreneurship and entrepreneurship, where entrepreneurship is a process where opportunities
are explored and identified when the organisational functions are in running while international
entrepreneurship is a process of attempting creation and innovation and for the firm. Moreover,
the report found out that increasing foreign entrepreneurs ensures, economic development which
Wealth creation and sharing, Create jobs, Balanced regional development, Improving standard of
living and increasing exports.
INTRODUCTION
Expansion of business at the international platform helps the business to sell its services
across the globe. It increases the company's market share which results in maximization of
profits and also contribute in countries economy. The report discusses the impact of host
country's economic condition on the entity. It includes technological, social and political factors
prevailing in the country. It further ponders on role of government in helping the business to
expand globally by providing financial and technological assistance (Benefits of International
Trade, 2010). Further, it focuses on availability of opportunities for the enterprises at
international platform. In the end, the report discusses the reason of rapid growth in
internationalisation at the market place such as, high demand, availability of resources in the
foreign countries etc.
MAIN BODY
The person who expands business across the geographical borders after earning enough
brand image and profits within the national boundaries is referred as international entrepreneur.
International entrepreneurship can be in the form of establishing new business or getting
involved in the joint venture to make a global presence. Development of international
entrepreneurship helps in improving the economy of the countries. The business is required to
conduct extensive research in order to understand the taste and preferences of the customers of
different country. It also has to take ponder on the economic development of the country and

make an estimate for the profits that can be earned by the entrepreneur (Carraher and Paridon,
2015). Another factor that are taken into consideration are government, legal and regulatory
policies framed for doing business. Some emerging key issues are discussed below:
International entrepreneurship and economic development
In the upcoming era, international entrepreneurship is the reason of global development.
Entrepreneurship is establishing opportunities for employment and innovation across the globe.
Further, there are several factors that bring threats or new growth opportunities to the business
such as, technology, fluctuation in the economy of trading country, demographical changes etc.
Shift in the consumer demand due to change in taste and preferences, lifestyle of customer and
change in income also act as major driving factors in any business. Some economic factors
which affects the international entrepreneurship are listed below:
Resources: Unavailability of resources can affect the functioning of the enterprise. The
quantity and quality of the available resources should be efficient enough to fulfil the purpose
and objective of the business. Natural resources include, plants, land, and water resources. Other
resources available beneath the ground such as oil, minerals, natural gas, metals and non-metals.
Further, the climatic conditions of the country also affects the smooth functioning of trade. For
instance, Arab countries have oil mines which shows that the cost of oil at these locations will be
low and the company which requires extensive oil in production can set up their factories and
expand their businesses in these countries (Cavusgil and Knight, 2015).
Foreign trade conditions: Some countries have stringent rules and entrepreneurs can
face tough time in entering these countries. There is a certain quality of benchmark followed by
the countries before importing goods. The company who wants to enter in another market have
to follow these laid down rules. Also, some entrepreneurs are not able to enter in certain market
due to their restricted policies regarding globalisation. There are few basic favourable conditions
which an entrepreneur follows which act as tonic to improve economic growth of international
market which are as follows:
Entrepreneur should ensure that shift of its manufacturing activities can increase the
industrial economy to developing economy of the country by not just selling commodities but by
also offering services.
Trading internationally improve the movement of goods and services to larger extent.

World trade organisation offers free entry exit of entrepreneurs without any barriers. Its
main motive is to establish environment which accepts the multilateral exchange of goods and
services.
Availability of human resources: Countries may or may not have experienced labour. It
depends upon their education, training and other creative abilities. Skilled and trained labours are
able to produce high quality outputs and thus results in high profits. Unskilled labour reduces the
company's growth. The expansion is easy in the countries which have cheap availability of
labours. It reduces the cost of the manufactured products which in turn maximizes profits of the
entity (Coviello, 2015). Further, the decision of production or import should be taken by the
entrepreneur wisely. It depends of the production whether it is low in home country or host
country. A cost analysis is required to be done by the enterprise in order to reduce the cost
(Hjorth, 2013). In contrary, the recruitment of plays the major role in international country as it
turns difficult for the enterprise to search for the skilled employees in foreign countries.
Technological development: The availability of technology in the countries affects the
growth of the company. The production and scientific methods most commonly used in the
countries in to be considered before taking decision of expansion. Developing countries own
high quality technology which reduces the time involved in production. In this case, the company
can set up its factory in the host countries as well. Section of right technology at the right place is
required to be done in different countries for effective and efficient use of available resources. It
further helps in reduction of the cost as well.
Social and political factors: Customs, traditions, values and beliefs of the people of the
country helps to decide whether the product or services offered by the entrepreneur will be
effective enough to be accepted by the people. It also estimates the growth and profits of the
enterprise. It contributed to the growth of the company to a great extent (Terjesen, Hessels and
Li, 2016). Further, political factors such as government intervention in decision making and
formulating policies also affect the functioning of the company in other country.
Entrepreneurial opportunities at international platform
International platform gives an opportunity to the entity of growing and expanding
business activities globally. The successful entrepreneur who have already established its
business in its home country can maximize its profits by expanding in other countries. This not
only increase revenues, however, it helps in making the company a global brand having presence

in various host countries. It helps in growing the size of the firm. Some opportunities are
discussed below:
High demand: The company has the access to higher demand area where people are ready to
accept new products and the entity can earn higher profits. However, it is important that the
entity choose the country whose public is acceptable towards the new products.
Lower investment: The entity can tap the market where production cost is lower than that of
home country. Foe instance UK can set up its industries in Asian region where there is cheaper
availability of labour. It reduces the cost of production and hence, helps in profit maximization
(Wennekers and et.al., 2010).
Increase in customer base: The company can tap potential customer of foreign countries which
increases their global market share and brand value. It helps to develop higher customer base for
the enterprise. Further, the company is able to earn the trust of more customers belonging to
different countries (Zander, McDougall and Rose, 2015).
Higher revenues: The company get chance to generate higher revenues. Investors tend to invest
in the company due to its growing market share. It helps the small business to get funds in order
to expand more in the market.
Cheaper availability of resources: Expansion in the countries where raw material and labour
are available at lower prices helps to reduce the manufacturing cost of the company (Zucchella
and Magnani, 2016). Availability of skilled and trained labour at cheaper cost reduces the cost of
labour as well. It reduced the ultimate manufacturing cost leading maximization of profits for the
enterprise. In contrary, cheaper resources affects the supply of goods for local entrepreneurs.
Time: It is very important for entrepreneur to have proper time management like, at what
expanding the firm can increase its sales of goods and services.
Difference between entrepreneurship and international entrepreneurship
Entrepreneurship International Entrepreneurship
It is a process where opportunities are explored
and identified when the organisational
functions are in running.
It a process of attempting creation and
innovation and for the firm
It plays a major role in development of
business organisation.
It plays a major role in economic development
across the globe.

These are basically small and medium
enterprises.
The basic characteristic of international
entrepreneur is risk taking.
Focus on entering new market to provide
import and export, business process, education
research, knowledge process outsourcing etc.
Motive is to increase net turnover and earn
maximum profitability.
Roles of international entrepreneur in economic development
There are five key roles of international entrepreneur which helps in economic
development which are as follows:
Wealth creation and sharing: By expanding the business, entrepreneurs invest their own
capital and resources in international economy. This improves the wealth of the country and
increase supply of differentiated goods and services which helps in creating innovative
environment and developing the network of distribution channel (Zucchella, and Magnani,
2016).
Create jobs: International entrepreneurship helps in creating job opportunities and
eradicate unemployment from the country. Moreover, to increase the entrepreneurship
government take initiatives to support new start-up (Ferreira, and et.al 2017). This helps in
giving stability of life and livelihood to people who are unemployed because of fewer
opportunities. Increasing international entrepreneurs provides employment opportunities to
people who are skilled but unemployed because of lack of job availability. In contrast, domestic
labour and citizens of the country feels that there employment rights are exploited with the
increasing foreign enterprises.
Balanced regional development: This also helps in development of backward areas of
economy by setting up industrial units. International entrepreneurship play a major role in
establishment of infrastructure globally by developing roads, rail links, stable electricity, water
supply etc. Regional development by enterprises is promoted by both state and central
government (Welter and Smallbone 2011).
Improves the standard of living: Economic development also involves the standard of
living which is also improved by international start ups. Entrepreneurs not only create jobs but
also enhance the standard of living by adopting innovation and developing quality of life of

customers, employees and other stakeholders. Increasing job opportunities helps the international
citizens to change the sense of living and develop the livelihood standards.
Exports: Any growing enterprise will initially start with exports to expand its market
across the globe. Further, it also plays a major role in economic development because it provides
(Schaper. And et.al., 2014). Entrepreneurship and small business access to bigger markets, leads
to flow of currency, and promotes the use of advanced technology.(Dau and et.al 2017).
International trading helps in creating stable business environment as it is not regularised by
local economy. Exports enhance the availability of products and services in international market
which leads to international economic development. In contrary, the sale of domestic suppliers
decrease with increasing foreign entrepreneurs.
For instance taking about UK, it is ranked fourth number globally for economic
development because international entrepreneurship. According to the figure of global
entrepreneurship development index, which includes the entrepreneurial development of 130
countries recorded that United Kingdom stands first, Canada second and third is Australia.
Ranking of UK in this index improved continuously in past three years with the help of many
new start-ups like for example, government of UK, has launched initiative which is start up loan
scheme, in which it provides loans, mentoring and advice to new firms. Moreover, with the
support of UK government 30000 new enterprises were established, till now scheme has lended
120 million pounds to new entrepreneurs in UK.

Entrepreneurial entry into international business
1. Exporting: Initially, every business before establishing its enterprise in new market first
focus on exporting its goods and services, which help them in analysing consumer
reaction towards the services provided by enterprises (Chaston, 2017).
2. Licensing: In this, the manufacturer gets permission from foreign manufacturers to use
patent, trademark, and technology. This is the most appropriate method for business to
enter into international market instead of exporting and indirect investment. Moreover,
entrepreneur need to have careful analysis of the licensing and international legal frame
work to avoid any kind of pitfalls (Storey 2016).
3. Turn key projects: Countries which are underdeveloped seeks the help from turn key
projects which helps in establishing economic control. International entrepreneurs builds
the facilities like, train management, roads, routes etc. to ensure proper transport facility
within the country (Brush 2012 ).
Illustration 1: International job satisfaction score
Source: Zucchella, and Magnani, 2016

4. Minority interests: These provide captive market for availability of products and source
of raw material. Entrepreneurs gives importance to minorities before making major
investment in international economy.
5. Joint ventures: Sometimes two enterprises join hands before entering into international
economy because entry into new market needs risk taking and investment of large
amount of capital (Storey and Greene 2010).
6. Direct exporting: In this type of exporting, foreign distributor contacts foreign customers
for purchase and sell activities and ensure proper use of technologies.
Theories of economic development which relates to International Entrepreneurship
Source: Harod Domar of Growth and its limitation 2012
International entrepreneurship leads to economic development as it leads to increased income,
output investment and savings. Further, it also needs large capital stock which leads to more
capital generation (Williams and Nadin 2012). Further, the international entrepreneurs assist the

economy by creating employment opportunities which increase income and increasing income
leads to increasing saving and investment. Besides the increasing entrepreneurship leads to
contribution in economy which assist the foreign countries in economic development and
increasing capital stock with the enterprise.
Source: Kiss, Danis and Cavusgil., 2012
Entrepreneurs are spread across the globe as it provides various growth opportunities, surplus
labour, in every manufacturing sector of the Country which leads to increased income at every
level and impact the economic growth and development. Structural growth model assist the
enterprise in evaluating their shortcomings by organising their business functioning in order to
contribute in economic development of the country. Further, increasing foreign enterprises
emphasizes on development of rural agricultural and urban manufacturing sectors (Structural
Change theory 2017).
International Entrepreneurship
ISSUES

Abstract: Issues that are currently faced by international entrepreneurship deserves attention
from interested students. Understanding used by professionals for gaining knowledge upon
opportunities available in culture to take new-value creating initiative. International
entrepreneurship is doing business activities across national geographical boundaries. It includes
exports, imports, licensing, or opening of sales office in another nation. It is significant as the
sales of company can be equalled by international business if domestic business is declining.
The issues that affects international entrepreneurship Manufacturing/Production Costs: If costs in relation to production of goods are
increased or availability of raw material has risen, then it may occur that production falls.
Moreover, company may have to import raw material from outside nation to fulfil
demands of product, or they may lose their stakeholders. Until, favourable conditions are
not arrived they have to make substitute arrangements for maintaining business
operations. Sometimes, due to fall in material supply in domestic market decreases
demand for goods in domestic market falls. At times international business acts as
saviour for company, goods are sold in global market and it serves business to manage
overall sales (Awogbenle, and Iwuamadi, 2010).
Labour Availability: Quantity of labour available in the organisation is a major challenge in
international business. They manage operations of business, thus, labour at feasible rates must be
available to entrepreneur (Terjesen, Hessels and Li 2016). International concern may be help in
such a situation company can outsource workforce from outside the local region. Increased
labour costs results in lower production, resulting turnover gets affected and overall profits of
entrepreneur may suffer. However, it is important for business to identify from where to bring
labour from, either local or international. Sometimes, due to incorrect information given by
analysts company may cost high in labour.
Availability of talent and competence: Company must posses competent managers and
knowledgeable workforce to manage its operations locally and globally. It is one of the key issue
that is faced by businesses. Similarly, as in case of labour availability, finding skilful and
competent managers is a challenge for entrepreneur. If required skills are not present in an
organisation they it would cost them unfavourable returns (Brown, Mawson and Mason 2017).

Non-availability of Information with Entrepreneur: If the business in new in market then
entrepreneur would not be aware of conditions of marketplace. Thus, they may not be able to
formulate effective and appropriate strategies. Moreover, they may not be able to know about
tastes and preferences of consumers. As a result of consequence product may not be accepted in
the industry (Stokes Wilson and Wilson, 2010).
Attitude of Entrepreneur: Business must be started with positive mindset towards the region,
where entrepreneur has set up their operations. If negative image is in the eyes of entrepreneur
they won't be able to set up business over there. Misunderstanding will prove to be major barrier
for organisation in international trade (Smallbone. and et.al., 2010).
No network influences: before starting up operations in other nations, entrepreneur may not
have contacts in that particular country. It is a difficult situation for them to establish business
over there. Moreover, it may result in difficulty in getting required permission for setting up
business (Schaper. and et.al., 2014).
Financing problems: As in establishing new business unit across other nation, huge amount of
funds are required. Due to large amount of risk involved in business, financial institutions may
be reluctant to provide funds (Ferreira Fernandes and Ratten 2017).
Tariff Barriers: Tariff are the duties imposed by government over businesses. Due to increased
tariff rates imports may get high priced. Interestingly, goods and services gets less attractive to
buyers, and they might shift to domestic products and services.
Non-Tariff Barriers: These are the obstacles other than import duty, like testing, certification
restraining imports. These are the measures that government takes to discriminate among
domestic and foreign goods.
CONCLUSION AND RECOMMENDATIONS
With this report it can be summed up that with international entrepreneurship there are
both advantage and disadvantages involved. Its is not easy for entrepreneur to see business
flourish globally in short span of time. Advantages are high demand, lower investments, increase
in customer base, higher revenue and many more. With the increase in business level comes
benefits and carrying disadvantages too. They are high manufacturing costs, shortage of labour,
tariff or non-tariff barriers, finance related issues or no network influence. To overcome

drawbacks and get benefited of business across international boundaries there has to be an
appropriate plan articulated on part of entrepreneur.
Recommendations to overcome issues are:
 Expansion: When a local company combines with the international it gives more
security to investors. Merger of corporate strategies, finance, management dealing in
operations related to selling, buying etc. helps organisation grow faster. Mergers can be
of two types vertical or horizontal:
Horizontal: It is kind of merger when company ties with an organisation in similar sector
involved in same kind of production. For instance: Bike manufacturing company gets merged
with another manufacturer in same creation (Wach, 2014).
◦ Vertical: It is the combination of two organisations involved in successive stages of
manufacturing stages. This may involve relationship of buyer and seller, ex: a
company getting merged with an organisation that sells raw material that is used in
production process top former (Hjorth,2013).
 Turn key projects: It refers to a kind of agreement under which a company
manufactures finished product for another i.e. ready to sale. For ex: Company A having
operations in USA wants to establish their business in UK, they may tie up with an
organisation in UK. Then UK company would manufacture product for USA one and
then company A would directly sell it in United-Kingdom (Spigel, 2017).
 Management Contract: Here operational contract is vested in hands of another
company who operates in that country locally, where international entrepreneur want to
set up their business. That separate enterprise would manage necessary managerial
functions on behalf of international business in exchange of a commission or fee. These
type of contracts involve not only managing franchising or licensing but also operational
activities like production facility, personnel management, marketing etc. (Marlow and
Al-Dajani2017).
 Product Extension: it is a kind of merger, where two companies combine and produce
similar product and sell in different geographical markets. It would help them in

combining management skills, production process and marketing strategies to earn higher
revenues (Ferreira Fernandes and Ratten 2017).

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