Entrepreneurial Ventures and Small Business Impact on the UK Economy

Desklib provides past papers and solved assignments for students. This report analyzes the impact of small businesses on the UK economy.

Entrepr
eneurs
hip and
Small
Busines
s
Manag
ement
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Table of Contents
Task 1....................................................................................................................................................3
a) Critically examining the scope, development and growth of entrepreneurial ventures (various
kinds of businesses) in your borough. You can develop you answer by considering various kinds of
entrepreneurial ventures within the private and public sector and examining their similarities and
differences.........................................................................................................................................3
b) Critically examining how small businesses have impacted on the economy making reference to
relevant data and statistics. You must try to illustrate the importance of small businesses to
economy and the growth of the social economy using the data and statistics. This can be achieved
by drawing comparison to medium and large businesses...................................................................9
References...........................................................................................................................................12
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Task 1
a) Critically examining the scope, development and growth of entrepreneurial ventures
(various kinds of businesses) in your borough. You can develop you answer by
considering various kinds of entrepreneurial ventures within the private and public
sector and examining their similarities and differences.
To, Date: 05-02-2019
Tax Collection Council
Scotland
Re: Latest state of entrepreneurial activities within Scotland, UK.
Dear Sir,
Please find attached the report on the various entrepreneurial ventures and their impact on
the national and social economy of UK attached below.
From,
John Miller
Chairperson of the Committee
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Introduction
The main objective of the following report is to gain understanding of the various kinds of
entrepreneurial ventures within private and public sector and the similarities and differences
between them.
Entrepreneur:
An entrepreneur is the person who creates and undertakes the risks of the new business. An
entrepreneur creates and manages a new business venture by taking the initiative towards the
beneficial opportunity and assumes the risks for the business by deciding what, how and
when goods needs to be produced. The various activities of the new business venture are
controlled by the entrepreneur. Therefore, an entrepreneur is said to be a person who brings
something innovative and unique in the market by taking risks (Kirzner, 2015).
The process through which an individual makes full utilisation of the given opportunity in
order to convert it into useful and innovative products and services to create value for the
society is called entrepreneurship. Most often entrepreneurs and intrapreneurs are used
together but there is difference between two. An entrepreneur is a person who willingly takes
risks in order to create a new business while an intrapreneur is a hired employee by the
organisation who just promotes innovation in the organisation (Burns, 2013).
Types of Entrepreneurship:
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Types of Entrepreneurship
 Corporate Entrepreneurship: Corporate Entrepreneurships are also known as Large
Company Entrepreneurships. The entrepreneurship activities are mostly carried out in
large corporations. Example: Apple
Apple is a large company. In order to sustain its existence and competitiveness in the
market, the company needs to expand their entrepreneurial activities by continuously
creating and providing unique and new products to their customers. In order to achieve
this, Apple invest in new products and services and take risks on its own. The working
environment at Apple supports experimentation and innovation and has the ability to cope
up with the successes as well as failures of the company. The culture of the company
encourages its employees to continuously come up with new ideas and innovativeness so
as to provide customers with new and innovative services and products (Carter & Evans,
2012).
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Types of
Entrepreneurship
Corporate
Entrepreneurship
Private/
entrepreneurship
Social
Entrepreneurship
Public Sector
Entreprenurship
Academic
Entrepreneurship

 Private/Independent Entrepreneurship: Private Entrepreneurship refers to the process
of entrepreneurship being practised in private firms operating on small or medium scale.
Most of the small as well as medium organisations belong to private entrepreneurship
category.
For example: Small entrepreneurship examples include plumbers, electricians, travel
agents etc. who runs their business with the objective of earning in order to sustain life.
On the other hand, medium organisations like Amazon are the private entrepreneurship
firms which have the vision of bringing change in the world from their entrepreneurial
activities. They hire best employees and contribute to the national economy by providing
employment opportunities for the local people (Carter & Evans, 2012).
 Intrapreneurship: Intrapreneurship refers to the entrepreneurship that takes place within
large companies where the managers encourages the employees to bring forward
innovative and creative ideas in order to create and develop new and unique products and
services.
 Social Entrepreneurship: The social entrepreneurship focuses on the social needs by
creating unique and new services and products for the betterment of the people of the
society. Social entrepreneurship is usually carried out by social enterprises like NGOs and
charities. These organisations adopt entrepreneurial approaches in order to solve social
issues and provide services to society. Their growth and development is extremely
important for the betterment of the society.
For example: Grahmeen Bank in Bangladesh provides financial services to poor women
by providing credit at cheap interest rates to help them in their micro businesses. They
contribute significantly towards social economy.
 Public Sector Entrepreneurship: The entrepreneurship activities practised by
government organisations are referred to as public sector entrepreneurship. For example:
NHS is a public sector organisation formed to provide free health services to the people
of UK and to improve the health conditions of the people of UK. The main objective of
these enterprises is to provide effective services to the people. The funds are provided by
the central or the state government.
 Academic Entrepreneurship: Academic entrepreneurship refers to the entrepreneurship
carried out by the academic institutions in order to create new processes and systems for
the future betterment (Schumpeter, et. al., 2012).
Similarities and Differences:
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Grameen Bank NHS Apple
Goal To earn profit for the
betterment of the society
To provide health services
for free in order to
improve the health of the
people of UK.
To become the leading
organisation in its industry.
Objectives The main objective is to
give financial
independence to poor for
their businesses.
To meet the clinical needs
of all people of UK.
To provide unique and
creative products and
services to its customers
with best quality.
Capital Utilise business profits
for social cause.
Funds are provided
through taxation.
To make huge profits for the
business.
Borrowing Loans from other banks From National Insurance
Contributors
From angel investors like
Mike Markkula
Decision
Making
Senior management and
board of directors takes
the decisions.
Board of Directors CEO of the company.
Customer Base
Relation
The relations with the
borrowers are based on
trust.
Fulfilling the clinical
needs of the patients
Customer Relations are
based on high quality
innovative products.
Financial
Resources
Loans from other
government banks.
The taxes collected by
government are the main
source of fund.
Shares of the company.
Number of
employees
More than 2000
employees are presently
employed by
organisation.
Approximately 1.6 million
people.
More than 1, 25000
employees
Risk Involved Inherent risks lies with
social enterprises.
The main risk is the
increasing cost of the
social care in coming
future.
Rapid advancements in the
technology and increase
demands for innovative
products.
Taxation Tax free from
government
Doesn’t pay tax to
government.
Pay tax to government.
Challenges Application of various
technologies in order to
Access to important To remain competitive by
innovating new products at
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achieve objectives. medicines after Brexit. affordable prices.
Products and
Services
Provides various
different kinds of loans
to poor.
Health care services and
cost free treatments.
iPhones, Laptops, Desktops,
iTunes, iPads etc.
Conclusion
In the above report, we have discussed the various different types of entrepreneurial ventures
within the public, private and social sector and have also identified the similarities and the
differences between each of them.
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b) Critically examining how small businesses have impacted on the economy making
reference to relevant data and statistics. You must try to illustrate the importance of
small businesses to economy and the growth of the social economy using the data and
statistics. This can be achieved by drawing comparison to medium and large businesses.
Introduction:
The following report has been prepared in order to understand the importance of the small
businesses for the national economy and the impact of the small and medium businesses on
the social and national economy of country.
Impact of the Small Businesses on the National Economy:
The micro and small business enterprises are considered to be the backbone for the national
economy of UK as they contribute significantly in the growth of the national economy. It has
been observed that approximately 3550 small businesses started in UK during the year 2015-
2017. The reason behind this is the government of UK which encourages small and micro
businesses as they play a vital role in economy of UK. If we believe reports, than more than
15 million of people in UK are employed by the small and medium sized organisations.
Hence, it can be said that almost 60 of the total workforce of UK is employed by small and
medium enterprises and they generate a significant amount of revenue that contributes in
economic growth of the country. According to reports, almost 1.8 billion pounds i.e. almost
45 % of the annual turnover of UK is generated by small and medium enterprises. The
revenues are also generated through the collection of taxes from the small and medium size
enterprises. They help the people of UK in raising their standards of living by employing
them and increasing their disposable income. Therefore, they impact the national economy as
they are the major source of revenue generation as well as the employment providers (Myers,
2014).
Besides small and medium organisations, large organisations also contribute in national
economy by providing employment opportunities on large scale. With the increasing
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competition, large scale companies not only provide employment on national level but also
international level and hence contribute in economic growth (Storey, 2016).
(Source: https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/
economicreview/apr2017)
Impact on Social Economy:
Small and medium enterprises are crucial for the growth of social economy of UK just like
national economy. Their importance for the society can be understood in terms of the
employment opportunities and the revenue generated from these enterprises. By employing
the major portion of the UK’s workforce, small enterprises facilitate the active cash flow in
the country’s economy. Small and medium enterprises generate revenue and employs
workforce which helps in reducing poverty in the country. The standard of living of people of
UK and their per capita income also increases. It helps in huge revenue generation which in
turn gets utilised by the government for the social causes like hospitals, schools, colleges etc.
in the form of taxes collected from SME’s. Hence their contribution in the growth of the
social economy of UK is of great significance (Hardoon, 2015). This can be understood better
by comparing SME’s and Large organisations.
Type of Enterprise SME’s Large
Number of Employees SME’s may be classified as Large enterprises usually
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micro, small and medium
organisations employing
staff ranging from 1 to 250.
have more than 250
employees.
Decision Making Decisions are made quite
fast and this is the reason
behind their fast growth.
They take long to make
decisions as more levels of
management are involved.
Attitude Towards Risk They need to take risks
carefully due to limited
resources.
They can take large risks
due to high capital.
Innovation Focuses on innovation with
limited capital and
resources.
They have huge capital to
invest in new technologies
and innovation.
Allocation of Resources Small business usually has
limited resources which are
allocated based on
requirements (Allan, 2014).
The allocation of resources
is quite independent as they
have abundant resources.
However, the SME’s and large enterprises differ in their characteristics but the impact of both
on the national and social economy of UK is quite significant. Both provide employment
opportunities, revenue generation in the form of taxes and reduction in poverty. Thus, both
are important for the social economy as businesses usually start from small or micro and
gradually move to become large enterprises.
Conclusion:
The above report concludes that small and medium as well as large enterprises are of great
importance for the national economy and the social economy of country as they provide
employment opportunities and generates revenue.
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References
 Allan, J., 2014. Small businesses are the UK’s greatest advantage- we must help them
look overseas. [Online] The Guardian. Available at:
https://www.theguardian.com/business/blog/2014/jul/02/uk-small-businesses-look-
overseas-growth [Accessed 05 February 2019]
 Burns, P., 2013. Entrepreneurship and Small business. Palgrave MacMillan.
 Carter, S., & Evans, J.D., 2012. Enterprise and Small Business: Principles, Practice and
Policy. Pearson, London.
 Hardoon, A., 2015. The importance of small businesses in the UK economy. [Online]
Small Business. Available at: http://smallbusiness.co.uk/the-importance-of-small-
businesses-in-the-uk-economy-2492626/ [Accessed 05 February 2019]
 Kirzner, I.M., 2015. Competition and Entrepreneurship. University of Chicago Press.
 Myers, M., 2014. UK rises to fourth most entrepreneurial economy in the world. [Online]
Imperial. Available at: https://www.imperial.ac.uk/news/162146/uk-rises-fourth-most-
entrepreneurial-economy/ [Accessed 05 February 2019]
 Schumpeter, J.A., Becker, M.C., Knudsen, T., & Swedberg, R., 2012. The Entrepreneur.
Stanford University Press.
 Storey, D.J., 2016. Understanding the Small Business Sector. Routledge.
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