Impact of Entrepreneurial Activities on Employment in the UK - Outline Example

?Entrepreneurship Table of Contents Table of Contents 2 Introduction 3 ment of the Problem 3 Research Objectives 4 Research Question and Hypothesis 4 Background of the Study 5 Literature Review 5 Research Methodology 8 Limitations 9 Conclusion 9 Works Cited 10 Bibliography 12 Introduction Entrepreneurship is regarded as one of the major activities for fostering economic growth. Entrepreneurs are essential instigators for renovation in an economy, and entrepreneurship accelerates the growth for new economic and industrial prospects and effectual resource utilization. The efficacy of an economy is improved when entrepreneurs perform to simplify trade between organizations or countries with different inclinations and resource endowments. Economic progress takes place when entrepreneurs accelerate the generation, distribution and application of pioneering thoughts. Entrepreneurship not only takes advantage of new business prospects by proper distribution of resources, but it also pursues new potentials for resource utilization and thus re-draws the limitations of economic movement. As a result, entrepreneurial activities help to reduce the unemployment rate and poverty (Organisation for Economic Co-operation and Development, “Fostering Entrepreneurship”). Statement of the Problem The association between entrepreneurship and employment is covered with uncertainty. It can be stated that lower degree of entrepreneurship can result in low economic development which in turn can impact on the level of employment rate. Entrepreneurs can create new businesses and organizations, which generate job opportunities, therefore reducing the unemployment rate. On the other hand, new businesses and organizations are considered of having low rate of survival and growth due to huge competition in the market, thus this fact argues that entrepreneurship can lead to unemployment. A few researchers have stated that the share of employment from new businesses and entrepreneurship activities are quite low, therefore does not have significant impact on employment opportunities. Thus, this research will aim to provide an insight about how entrepreneurship in the UK is related with the employment rate. It is the central problem of the study to understand that whether entrepreneurship has either positive or negative impact on the employment creation in the UK. Research Objectives The study will have the following objectives: To measure the impact of entrepreneurial activities on employment in the UK To discover the relationship between entrepreneurial activities and job creation To know the view of people in the UK towards new innovations and businesses To identify the effect of entrepreneurship in the economic development of the UK Research Question and Hypothesis The study will seek to resolve the following research question: “Does entrepreneurial activity create an impact on the employment rate in the UK?” In order to resolve the above research question, hypothesis has been developed which can help to understand the relationship between entrepreneurship and employment in the UK. The null hypothesis (H0) will be = “Entrepreneurial activity increases the employment rate in the UK” The alternate hypothesis (H1) will be = “Entrepreneurial activity does not increase the employment rate in the UK” The hypothesis will be tested with Pearson correlation analysis by using statistical data. Background of the Study In present days, relations among new creations, new business proprietorship and economic growth have been acknowledged for substantial consideration from researchers and policy creators. The increasing unemployment rate in several countries along with inadequate economic development has prompted the policy developers to provide higher attention to entrepreneurship and self-employment. Entrepreneurship has been recommended by many researchers as a cure against higher unemployment and slow economic development. Europe and other industrial economies of the world have practiced substantial industrial reforms in last few years, shifting from traditional business activities towards use of more complex technologies. The main aim for this reform is to generate new businesses and companies as well as encourage employment growth (Audretsch & Et. Al., “Does Entrepreneurship Reduce Unemployment?”). Literature Review Entrepreneurship plays a significant role in any economy. It inspires the use of new technology and increases the economies of scale. As a result, organizations can generate more products with lesser cost. Entrepreneurship is not only a remedy for unemployment, but also can result in prospering economy with increasing job opportunities. Jobless persons have a tendency to have lower endowment for human and social assets, and they also demonstrate low degree of personal capital, reducing the probability of becoming self-employed. They are also unable to exist in the early phases of business proprietorship (Stel & Et. Al., “The Relationship between Entrepreneurship and Unemployment in Japan”). According to an observation by Schumpeter, entrepreneurs are innovators who can initiate economic development. The innovative thoughts of entrepreneur encourage pioneering destruction procedure for economic growth. Entrepreneur can initiate innovation which is motivated by competition to develop new skill, new technology and new organizational arrangement. Schumpeter also stated entrepreneurship as “industrial mutation”, which incessantly transforms industry to new financial structure by ending the existing ones (McCraw, “Prophet of Innovation: Joseph Schumpeter and Creative Destruction”). Innovation is an important component for economic revolution, and entrepreneurs play significant role in initial progression of industry through new products and processes. The industrial progression can help to develop new businesses which lead to consequent reduction in unemployment rate (Bull & Willard, “Towards a Theory of Entrepreneurship”). Among other G8 nations, the UK is considered as a nation with higher entrepreneurial activity, and the people in the UK usually have optimistic approach towards entrepreneurship. In the UK, the creation of new businesses is regarded as one of the major drivers for reducing the productivity deficiency, increase innovation and develop a strong competitive business environment. Since 2004, particular strategies towards entrepreneurship in the UK have been absorbed about seven subjects which are: generating a creative culture, sustaining in dynamic start-up markets, increasing capability of business growth, improving access to finance, developing commercial experience of governmental facilities, developing enterprise for all and foster better regulation. The prospective of entrepreneurial activity to encourage reinforcement and evolution can reproduce the forms of business being established. If entrepreneurs assume to generate huge number of employments, or if a product or procedure is new in the market, then there is more prospect for progress and rejuvenation of industry through entrepreneurship (Harding, “GEM UK United Kingdom”). Along with the attempt to entice investment, stimulating entrepreneurship is considered as one of the most important stakes for local and provincial economic development strategies. The first contribution of new business creation to employment growth is obviously towards the number of jobs which are directly generated as new businesses enter in the market and develop. There are several contradictory viewpoints about this research subject. Van Stel and Storey (2004) had argued that, new businesses directly contribute little percentage of jobs and most of the new businesses can dislocate existing businesses. According to Geroski (1995), the survival of new businesses in the market is relatively low and even successful entrepreneurs might take more than a period to attain a size equivalent to regular occupants (Audretsch & Et. Al., “Does Entrepreneurship Reduce Unemployment?”). On the other hand, Evans and Leighton (1990) established that employment and entrepreneurship is positively associated with each other, where Carree (1994) had stated that there is no statistically substantial connection that exists between these two aspects (Audretsch & Et. Al., “Does Entrepreneurship Reduce Unemployment?”). Audretsch and Thurik in the year 2000-2001 had presented that growth in the number of new businesses and entrepreneurs can significantly diminish the degree of unemployment (Baptista & Et. Al., “Entrepreneurship, Regional Development and Job Creation: the Case of Portugal”). Therefore, relationship between entrepreneurship and employment opportunities is still unclear, but, as new businesses provide a medium for the institutions of new thoughts and invention to an economy, it has been considered as crucial basis for long-term economic development (Nolan, A., “Entrepreneurship and Local Economic Development: Programme and Policy Recommendations”). Research Methodology Research methodology is the application of numerous procedures, tools and techniques throughout research to accumulate required information about the research topic. It is a significant element for conducting research. Every research must begin in an organized and strategic way by considering appropriate approach. In this study, mixed approach will be applied by considering both qualitative as well as quantitative approaches. The reason is that qualitative approach will help to understand the theoretical concepts and have broader understanding on the entrepreneurship issues which are related with employment. The quantitative approach will help to describe and to analyze the data and information in order to develop an effective conclusion to the research question. Quantitative approach will be used for describing and examining the data and information through diagrams, tables and statistical techniques (Kothari, C. R., “Research Methodology: Methods and Techniques”). The data for this study will be secondary data. In order to gather secondary data sources such as internet databases, government websites, journals, books and studies of other researchers will be used. Analysis is the most important segment of any dissertation. The secondary data from various sources in this research will be analyzed by qualitative as well as quantitative ways. Collected secondary information will be segmented and arranged in a systematic way to interpret into productive conclusion. The hypothesis will be tested by using Pearson correlation analysis. Limitations The major limitation identified for conducting this dissertation is availability of information. As the research will be based on secondary data, therefore there might be difficulty in gathering appropriate data about the research problem and hypothesis. Besides, there might be a risk of validity, consistency and accuracy. Therefore, in order to reduce the limitation, data from appropriate sources such academic or reputed organizational source will be used. Conclusion There are very few researches on this subject. It has been observed that several authors provide varied views on the impact of entrepreneurial activities and to which extent it can impact on economy as well as employment. Therefore, this research study can provide an experimental viewpoint on the impact of entrepreneurial activity on the employment rate in the UK. The UK is considered as a developed economy and therefore entrepreneurs play a significant role in the economic development of the country. In the long run, economic development can increase the level of employment. Through this research the economic development of the UK for a certain period of time will be studied and will be intended to relate this factor with the entrepreneurial activities in order to reach to any concrete finding. Works Cited Audretsch. & Et. Al. “Does Entrepreneurship Reduce Unemployment?”. January 19, 2012. School of Public and Environmental Affairs, 2001. Bull, Ivan. & Willard, Gary E. “Towards a Theory of Entrepreneurship”. Journal of Business Venturing 8.3 (2002): 183-195. Baptista, Rui. & Et. Al. “Entrepreneurship, Regional Development and Job Creation: the Case of Portugal”. January 19, 2012. Discussion Papers on Entrepreneurship, Growth and Public Policy. Harding, Rebecca. “GEM UK United Kingdom”. January 19, 2012. London Business School. Kothari, C. R. Research Methodology: Methods and Techniques New Age International, 2008. McCraw, Thomas K. “Prophet of Innovation: Joseph Schumpeter and Creative Destruction”. January 19, 2012. Harvard University Press, No Date. Nolan, Alistair. Entrepreneurship and Local Economic Development: Programme and Policy Recommendations OECD Publishing, 2003. Organisation for Economic Co-operation and Development. Fostering Entrepreneurship OECD Publishing, 1998. Stel, Andre Van. & Et. Al. “The Relationship between Entrepreneurship and Unemployment in Japan”. January 19, 2012. EIM Business and Policy Research, 2007. Bibliography Carree, M. A. & Thurik, A. R. “The Impact of Entrepreneurship on Economic Growth” January 19, 2012. University of Maastricht, 2002. Duygulu, Ethem. & Kurgun, Osman Avar. “The Effect of Managerial Entrepreneurship Behavior on Employee Satisfaction: Hospitality Managers’ Dilemma”. African Journal of Business Management 3.11 (2009): 715-726. Stel, Andre van & Et. Al. “The Effect of Entrepreneurship on National Economic Growth: An Analysis Using the GEM Database”. January 19, 2012. Scientific Analysis of Entrepreneurship and SMEs, 2004. Read More