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Entrepreneurship as a key solution for Unemployment

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9 November 2019 12:00 am - 0     - {{hitsCtrl.values.hits}}

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Entrepreneurship is considered to be the  engine for society development 

Through offering unique goods and services, entrepreneurs  break away from tradition and reduce dependence on obsolete systems and  technologies

Entrepreneurs regularly nurture ventures by other  like-minded individuals

 

Entrepreneurs play a vital role in job creation and  providing opportunities to young people. International annual Job  Creation Survey consistently shows that entrepreneurs’ hiring plans  outpace the rest. In 2015, it was found that 47% of entrepreneurs (and  77% of world-leading entrepreneurs) plan to increase the size of their  workforce, compared to 29% of large corporations. As a result,  supporting entrepreneurs to grow their businesses will have an impact on  employment rates. In a survey, it was found that 65% of the 2,800 young  people surveyed around the world want to run their own business at some  point in their careers – 27% want to do so immediately and 38% after  learning from someone else first. These ambitions are particularly  strong in developing markets, with Mexico (91%) and China (89%) leading  the way.  


Scientific research carried out by the writer in his Doctoral study titled 
“Transformation of Retired Military Personnel into  Economic Actors through Entrepreneurship as a Post Military Career  Choice : THE CASE OF SRI LANKA ARMY” using 1,450 retired Army soldiers (veterans) using proportionate and disproportionate stratified random  sampling techniques found that 62.2% veterans aspire to be Entrepreneurs,  whereas 27.6% do not prefer to be the same, 11.2% remained neutral. A  majority number of veterans prefer to be Entrepreneurs in their second  career due to possible prospects to overcome economic hardships.


 In the year 1977 the private sector was made the “engine  of growth” and it was given the authority and precedence to drive the  country’s economic growth. This was a transfer from public  entrepreneurship to private entrepreneurship in Sri Lanka to develop the  country. Therefore, the country must try to see new boulevards to  develop the country through private entrepreneurship not only because it  is the “engine of growth”, but also to align the country’s development  process to world inclinations. 

 

The way forward should be to establish Entrepreneurship  Development policies and institutions from the government, that focuses  on harnessing the power of the youth and empowering them with the tools  and means to venture out

 

UNEMPLOYMENT   
Unemployment is defined as a situation where someone of  working age is not able to get a job but would like to be in full-time  employment. However, if a mother left work to bring up a child or if  someone went into higher education, they are not working but would not  be a classed as unemployed as they are not actively seeking employment.  


Unemployment has been an issue in Sri Lanka for long and  many governments have tried to solve this issue by taking many strategic  initiatives. Sri Lanka has faced several internal conflicts due to  economic problems, unemployment and sporadic youth unrest. According to  the view of sociologists, anthropologists and intellectuals, the internal  conflicts faced by Sri Lanka for 30 years and the 1971 and 1989  insurrections were manifestations of such issues. Therefore, Sri Lanka  needs a rigorous and sustainable solution for unemployment for her to  achieve the set development goals.   


It is also evident that the female unemployment rate is  higher than the male unemployment rate. Therefore, the country must take  some action to create more opportunities for them to align with the  global trend of ensuring the equal rights of women. At present, the  enigma is “how to do it?”. However, in the future, there will be more  unemployment and unrest among the youth. Therefore, the country must  look to new ways and means to create new jobs for youth or any other  opportunities with which occupy themselves and earn money for their  living. 

 


 Entrepreneur
The Merriam-Webster Dictionary presents the definition of  an entrepreneur as one who organises, manages and assumes the risks of a  business or enterprise. The word entrepreneur originates from the  French language “entreprendre”, which means “to undertake”. Originally,  it was meant an organiser of musical or other entertainments. In a  business context, it means to start a business. The evolution of the  term “entrepreneur” dates back to many centuries.   


According to (Schumpeter, 1939) entrepreneurs are  individuals who develop businesses by bringing innovation to market and  entrepreneurship as how new market offerings cause creative destruction  by facilitating innovators to gain competitive advantage on the market.  Entrepreneurs have increasingly secured high recognition as the real  people behind the economic growth and development. Further, as an  academic, discipline entrepreneurship today is one of the most welcomed  and respected hot areas by academic institutions including most  Universities and business Colleges. The recognition of the field of  discipline is such that an assortment of academic work has been in  high current at any corner of the world today facilitating almost all  to have easy access. An Entrepreneur is a person who affects Inventiveness by organising a venture with the view of obtaining economic  and opportunity gain. He is a decision-maker and he decides what goods  or services are manufactured, how it is done and how much they are done.  The entrepreneur is the exclusive owner or at times a collaborator  or the one with the majority of shares in an incorporated business  enterprise usually administers and manages the business activities. 

 

New products and services created by entrepreneurs can  produce a cascading effect, where it stimulates related businesses or  sectors that need to support the new venture, furthering economic  development


ENTREPRENEURSHIP   
Entrepreneurship is considered to be the  engine for society development. Over a period of time the consideration  of meaning to the term entrepreneurship has been changed with the  development of the world, inventions and information technology.  Thereby, today’s view on entrepreneurship is different from the earlier  notion of entrepreneurship. It is an applied trade rather than academic  discipline which could be easily adopted by anyone who could not succeed  in education and become businessmen.  


The business dictionary defines the term entrepreneur as an  individual with the capacity and willingness to develop, organise and  manage a business venture along with any of its risks in order to make a  profit. The most obvious example of entrepreneurship is the starting of  new businesses. In economics, entrepreneurship combined with land,  labour, natural resources and capital can produce a profit.  The Entrepreneurial spirit is characterized by innovation and risk-taking  and is an essential part of a nation’s ability to succeed in an ever-changing and increasingly competitive global market place.​ 

 


​Why Entrepreneurship Is Important to the Economy  
Entrepreneurs are frequently thought of as national assets  to be cultivated, motivated and remunerated to the greatest possible  extent. Great entrepreneurs have the ability to change the way we live  and work. If successful, their innovations may improve standards of  living and in addition to creating wealth with entrepreneurial  ventures, they also create jobs and contribute to a growing  economy. Entrepreneurship is thus important for a number of reasons,  from promoting social change to driving innovation. 

 


ENTREPRENEURS SPUR ECONOMIC GROWTH  
New products and services created by entrepreneurs can  produce a cascading effect, where it stimulates related businesses or  sectors that need to support the new venture, furthering economic  development.  


For example, a few information technology companies made up  the IT industry in India during the 1990s. The industry quickly  expanded and many other sectors benefited from it. Businesses in  associated industries—such as call centre operations, network  maintenance companies, and hardware providers—flourished.  


Education and training institutes nurtured a new class of  IT workers who were offered better, high-paying jobs. Infrastructure  development organisations and even real estate companies capitalized on  this growth as workers migrated to cities where employment was growing.  


Similarly, future development efforts in underdeveloped  countries require robust logistics support, capital investments and a  qualified workforce. From the highly qualified programmer to the  construction worker, entrepreneurship benefits a large part of the  economy. 

 


ENTREPRENEURS ADD TO NATIONAL INCOME   
Entrepreneurial ventures help generate new wealth. Existing  businesses may remain confined to existing markets and may hit the  glass ceiling in terms of income. New and improved products, services or  technology from entrepreneurs enable new markets to be developed and  new wealth to be created.  


Additionally, increased employment and higher earnings  contribute to better national income in the form of higher tax revenue  and higher government spending. This revenue can be used by the  government to invest in other, struggling sectors and human capital.  Although it may make a few existing players redundant, the government  can soften the blow by redirecting surplus wealth to retrain workers. 

 


ENTREPRENEURS CREATE SOCIAL CHANGE   
Through offering unique goods and services, entrepreneurs  break away from tradition and reduce dependence on obsolete systems and  technologies. This results in an improved quality of life, improved  morale and greater economic freedom.  


For example, the water supply in a water-scarce region  will, at times, forces people to stop working to collect water. This  will impact their business, productivity, and income. Imagine an  innovative and automatic pump that can fill people’s water containers  automatically. This type of innovation ensures people are able to focus  on their jobs without worrying about a basic necessity like water. More  time to devote to work translates to economic growth.  


For a more contemporary example, smartphones and apps have  revolutionized work and play across the globe. Smartphones are not  exclusive to wealthy countries or people. As the growth of the  smartphone market continues, technological entrepreneurship can have a  profound, long-lasting impact on the world.  


Moreover, the globalization of technology means  entrepreneurs in lesser-developed countries have access to the same  tools as their counterparts in richer countries. They also have the  advantage of a lower cost of living, so a young entrepreneur from an  underdeveloped country can compete with a multi-million-dollar existing  product from a developed country. 

 


COMMUNITY DEVELOPMENT   
Entrepreneurs regularly nurture ventures by other  like-minded individuals. They also invest in community projects and  provide financial support to local charities. This enables further  development beyond their own ventures.  


Some famous entrepreneurs, such as Bill Gates, have used  their money to finance good causes, from education to public health. The  qualities that make one an entrepreneur are the same qualities that  help motivate entrepreneurs to pay it forward. 

 


ENTREPRENEURS OPEN DOORS TO NEW VENTURES  
Entrepreneurship is our greatest weapon to counteract this  issue and to empower our youth. Youth by default are energized and  empowered, they are willing to explore new territories and take up new  challenges and risks. While working as an entrepreneur, an individual  gets to work on multiple things, juggle different roles and turn them  into better leaders and better individuals. Put aside the fact that  Entrepreneurship brings big money from investors and even foreign  clients, it also has a key role to play in building a character.  


When battling unemployment, entrepreneurship is a solution,  entrepreneurs open doors to new ventures, new business, new alliances  etc. When an investor puts money into a startup or a venture, the  entrepreneur automatically gets to expand its team to scale the venture  and hence providing employment to more people. These days entrepreneurs  are willing to hire to even resources who do not have formal education  or a degree but have the right attitude, skill set and willingness to  learn, which is a big shift in the thought process in comparison to  corporate or big companies who are adamant on hiring from League  colleges or shortlist candidates on the basis of qualifications not  capabilities.  


The way forward should be to establish Entrepreneurship  Development policies and institutions from the government, that focuses  on harnessing the power of the youth and empowering them with the tools  and means to venture out. Off course not all ventures will take off and  few will have to come across failures often, the policies should be  planned in a way to cover that and promote a risk-free innovative  environment for entrepreneurs to flourish.

 


ENTREPRENEURSHIP IS NOT MONEY DRIVEN- BUT PASSION DRIVEN  
Entrepreneurship is not money-driven venture but a  passion-driven one that facilitates positive change in the society. The  role of the government in entrepreneurship should be that of a  facilitator and not a controller. The tremendous impact of the internet in  business, which has obliterated geographical barriers, has made the business  a lucrative career option. Many young minds now understand the  importance of looking at a steady business growth, forming the right  team and empowering it to bring about that growth. Targeting rural areas  and tier 2-3 cities with better product and services is the way forward  for entrepreneurs as there is already saturation in metros and big  cities. Industry experts say any business that adds value to the  quality of the life of youth will see growth. Startups have the  opportunity to grow and become big. Keep challenging yourself and keep  pushing yourself.

 


WAR ON TERRORISM HAD AN ADVERSE IMPACT ON THE ECONOMY AND ENTREPRENEURIAL OPPORTUNITIES   
The war against terrorism in Sri Lanka had an adverse  impact on the economy of the country. Although, doors were opened for  foreign investment in the country with the introduction of free economic  policies in the late 1970s, the country was not able to yield foreign  investment as expected due to uncertainties created in the political  climate in Sri Lanka by political riots and the ethnocentric conflict  that gathered momentum with the unfortunate events in July 1983 where,  thirteen Sri Lankan Army soldiers were killed by terrorists in the  North. This adverse environment became the main deterrent to foreign  investment which was expected to act as a catalyst to the economic  growth process of the country. During the same period, two major  multinational electronics companies, Motorola and Harris Corporation were  due to establish plants in the Export Processing Zone with an initial  employment capacity of 1,850 workers. However, it did not materialise  due to the above-mentioned reason. This had a negative impact on the  anticipated big leap forward and possible investments of other large  multinational companies in Sri Lanka result in a loss of Entrepreneurial opportunities. 

 


POLICYMAKERS MUST PAY SIGNIFICANT ATTENTION IN ENTREPRENEURSHIP   
​​Entrepreneurship is a key factor for economic  development. Public, private and non-governmental organisations take  various measures to promote entrepreneurship in different countries.  Universities and colleges throughout the world have implemented various  Postgraduate, Undergraduate and Diploma courses on small business  management and entrepreneurship. In a developing country like Sri Lanka,  the role of entrepreneurship development is more important than that in  developed countries as far as the creation of self-employment  opportunities and reduction of unemployment situations are concerned.  After the independence in 1948, each successive Government of Sri Lanka  has followed two different ideologies: one that believed in the free  economic system and the other that believed in a relatively controlled  economy. However, in the present context, the Sri Lankan economy seems  to be moving more towards the free enterprising system with the  emergence of the industrial and service sectors over the traditional  agricultural sector.  


​Further, Sri Lanka does not abundantly engage in  entrepreneurial researches compared to other countries though, it  experiences a rising concern in entrepreneurship fields by academic  scholars, policymakers and business experts. According to the  World Bank report (2008), starting and running business in Sri Lanka is  not easy. The ease of doing business index ranks economies from 1 to 178and  Sri Lanka has been ranked as 101. For starting a business in Sri Lanka,  an entrepreneur has to take five procedures and 39 days and it costs  8.5 times the annual income per capita. In addition to that, Sri Lankan  entrepreneurs have to go through 22 procedures and 214 days to deal with required licenses.


​​The Sri Lankan education system which mainly aims to prepare students for government employment is encouraged by this writer to popularize entrepreneurial exposure through the curriculum to engage in self-employment.As Sri Lankan society has not yet shown a positive attitude towards entrepreneurship, the researcher suggests that educators, policymakers, and others who wish to enhance entrepreneurial activity should focus first on developing selected personality characteristics among the potential entrepreneurs.

 

​​ABOUT US ARCHIVES CONTACT   
Sri Lanka must develop an entrepreneurial culture to achieve suitable development  
The year 2010 was a milestone in Sri Lankan history to  achieve the developmental goals when Fox Business rated Sri Lanka as the  best performing global economy. After the effective end of the internal  conflict in 2010 in Sri Lanka, the environment was peaceful for business  and investments throughout the country amid simple political issues  prevailing in the country. Sri Lanka has come to a middle-income country  during the last few years and the government has planned to transform  Sri Lanka into a strategically important economic centre by developing  five strategic hubs; a knowledge hub, a commercial hub, a naval and  maritime hub, an aviation hub, and an energy hub taking the advantage  of Sri Lanka’s strategic location and Consequent to the regime change in  2015, Yahapalana Government couldn’t keep the track to achieve economic  development and Sri Lanka missed a golden opportunity. 


According to the 2012 population census by the Department  of Census and Statistics of Sri Lanka, the total population of the country  was 20,359,439. The total number of establishments in the country was  about 131,387 according to the 2003/2004 census of industries. Thus, the  entrepreneur as per the percentage of  the population in a country is less  than 1% based on the available information.   


 However, this figure is relatively very high in some  developing countries viz Chile 11%, Botswana 11.1%, Jamaica 11.9%, Angola  12.4%, Vietnam 13.3%, Cameroon 13.7% Brazil 13.8%, Thailand 16.7% and  Uganda 28.1%. Thus, the percentage of entrepreneurs in Sri Lanka is  very low when compared to some developing countries. 

 


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 Sri Lanka introduced the open economic policy in the year  1977 before many other countries in Asia to align her economy to world  economic trends and to earn a higher economic growth whilst using  innovations and new product developments along with the development of new  services.  


According to Dr T. R. Perera, the inward-looking economic  policy practiced before 1977 promoted many indigenous businesses since  the Government promoted local businesses by giving many incentives and  subsidies to them. However, after 1977 due to open economic policy,  indigenous businesses had to compete with foreign products, processes,  technology, services, innovations and businesses. Hence, doing  businesses in this context was very complex as well as more dynamic than  in the past. Therefore, currently, Sri Lanka is in such a situation of  complexity and a dynamic environment in all what she does. In the year  1977, the private sector was made the “engine of growth” and it was given  the authority and precedence to drive the country’s economic growth.  This was a transfer from public entrepreneurship to private  entrepreneurship in Sri Lanka to develop the country. Therefore, the  country must try to see new boulevards to develop the country through  private entrepreneurship not only because it is the “engine of growth”,  but also to align the country’s development process to world  inclinations. 

 


EASE OF DOING BUSINESS IN SRI LANKA -2010  
When it comes to Sri Lanka ease of doing business can be  seen by taking some criteria into consideration as table 01 Ease of  Doing Business in Sri Lanka in 2010. Table 01 has compared nine factors  with Singapore as a developed country and Chad as an underdeveloped  country. According to it, certain indicators are better in Sri Lanka for  starting a business. However, needs improvements to encourage  Entrepreneurs. 

 


SRI LANKA TO FOLLOW USA ENTREPRENEURIAL CULTURE  
According to Insider UK (http://uk.businessinsider.com/);  United States is the best country to be an entrepreneur and also it has  the highest level of entrepreneurial culture as well. Therefore, Sri  Lanka can look at such developed countries and use their experiences in  the endeavour to developing an entrepreneurial culture to achieve the  set developmental goals of the country.   


 Developing an entrepreneurial culture will be the strategy  which gives a competitive advantage in achieving the development of the  country. South Asian countries have not developed entrepreneurial  cultures yet. They have a long way to go to achieve it. Therefore, Sri  Lanka can make use of this gap and utilize it for the benefit of the  country to achieve much-needed development.   


Once the entrepreneurial culture is developed, it is easy  for prospective businessmen and the investors to start and run  businesses in Sri Lanka as it will be an attractive incentive for them.  Hence, Sri Lanka must develop an entrepreneurial culture which is part  and parcel of this life of the people in the country. At the same time,  to empower women, minorities and underprivileged groups of the country,  it is a burning necessity to create an entrepreneurial culture to face  issues related to youth unrest and unemployment in the country.

 


CREATING BUSINESSES AND DEVELOPING ENTREPRENEURIAL CULTURE  
It is evident that in Sri Lanka, there is a high  unemployment rate amongst the educated than the uneducated in general.  At the same time the female educated have higher unemployment than the  male educated too. Therefore, the country needs to understand a  correction course to it as well to prevent the issues faced in the past  and to face the future strongly. Thus, what must Sri Lanka do as a  country now? Creating businesses and developing an entrepreneurial  culture will be a solution as well as imperative. In the future, there  will not be many employees in organisations since technological  advancements and digitization is happening all over the world affecting  businesses and development of other countries as well.   


Record-breaking eight million students have graduated from  Chinese universities in 2017. This figure was nearly 10 times higher than  it was in 1997 and in more than double the number of students in the USA.  This figure is more than one-third of our population. Can China provide eight  million Public/ private sector jobs annually?   


In Sri Lanka, in one hand, out of 220,000 students who  sit for the A/L examination, 23,000 become eligible to enter  university. In the other hand, the number of unemployed graduates in the  island is 58,812 which would grow further. Can any government provide Government jobs to above unemployed youth?   


Interesting, SLPP Presidential candidate Mr  Gotabaya Rajapaksa stated that 


“everyone is talking about the number of  jobs given but none is talking about how many jobs created”. 

 


 WHAT SRI LANKA MUST DO  
 Sri Lanka should plan a sound, sustainable and rapid  growth. Nevertheless, the unemployment issue resulted from economic  system reform, industrial structure adjustment and technological  innovations, remains a strenuous, arduous and pressing task for the  government. Therefore, the government must attach great importance to the  issue of and takes unemployment as the first priority of people’s  livelihood and as the top strategy for ensuring the stability of its  society. Proceeding from the national experiences in its  practice, gradually improves its relevant legal system, and formulate and  implement a set of employment policies. The government adheres to  promote employment through developing national economy, adjusting  industrial structure, furthering the reform on its political and  economic system, harmonizing economic development between urban and  rural areas and improving social security system. Government should  adopt effective measures and do everything possible to increase job  opportunities whilst creating conducive environment for entrepreneurs  who are the key players in creating jobs. As a country, Sri Lanka must  try to promote entrepreneurship through the development of an  “entrepreneurial culture”, thus developing Sri Lanka as a great  developed nation physically and spiritually. In this endeavour,  creativity and innovation will play a vital role to achieve the  development goals of the country with a competitive advantage over other  countries.   


In my opinion, creation of a employment self or paid  can be considered as giving everything to a person because the problem  of housing, education of children, health and all the basic needs of the  family unit can be either fulfilled or mitigated through one’s  employment. Provision of Samurdi or Janasaviya or free food culture in  the long run won’t take the country anywhere towards development and that is  why we are still a developing nation for the last 72 years since  independence.


Having saying so, the writer would like to suggest to  the incoming Government to pay a significant attention in identifying  and implementing the entrepreneurial path as a key solution to the  country’s unemployment and development.


Writer is the former Security Forces Commander (Wanni  Region), the Competent Authority for internally displaced Personnel in  North, The Colonel Commandant of the Sri Lanka Sinha Regiment, World top  ten in National Defence Studies (China), A Doctor in Economics and the  Architect of Wanni Bogaswewa settlement with 36 years of Active military  Service and presently working as an International writer and  International Researcher. Writer’s PhD is on Veteran Entrepreneurship.     


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