Michael Malone, a guest speaker for the MBA program at Oxford School of Business, talked to the students about entrepreneurship. He asked the audience to raise their hands if they considered themselves entrpreneurs. About 200 out of 400 raised their hands. Malone then reported that four years prior only about 20 hands went up in an audience of about 400. What a drastic increase!
More individuals are seeing businesses be successful and want to join in on those profits. However, with so many entrepreneurs desiring to enter the market, demand will decrease within their industry of choice and economic profits will also decrease to zero. But of course, the market will not support this, so some will pull out and profitability will rise again. However, the cycle continues. Others will join the market hoping to find profits and will decrease demand and economic profits. The only companies that are most likely to survive are those with the most capital and equity to sustain them in the long-run.
3 comments:
Entrepreneurship is considered to be the USA's greatest competitive advantage. Starting a business is a difficult undertaking that few truely have the courage to take.
It isn't surprising that more and more individuals want to become entreprenuers. Graduates coming out of college I think mostly have it in mind to initially work for a firm and gain some real world experience, but ultimately are planning to leave that company and do something on their own. That is my plan and I cannot wait to see if I have what it takes to be successful. People should now though, that owning your own business is hard work and very time consuming. Something like 75% percent of small businesses started will ultimately fail. So SUU graduates lets see what you are made of!
I have three thoughts.
First, SUU professors talk so much about entrepreneurship because our students are so interested in staying in this area. There are not that many good opportunities that don't require entrepreneurship around here.
Second, I think the increased interest in business entrepreneurship noted by Malone is a fad. It's currently seen as rewarding to be an entrepreneur, but I haven't seen the (actual) revenues or costs change at all.
Third, having said that, I think that this is a useful fad if it educates people about how broad entrepreneurship actually is. Artists and professors (even humanities and social sciences professors) are among the most entrepreneurial professions. Think about it: they are in the business of creating things that are brand new and then convincing others to put money on the table for them. Yet those two groups probably don't see themselves as closely aligned with business entrepreneurs (and vice versa). The world will probably be a better place when they do.
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