entrepreneurship labor capital land
The phenomenon of entrepreneurship acts as an integral attribute of a market economy. AT economic theory The concept of "entrepreneur" appeared in the XVIII century. and often associated with the concept of "owner". At its origins was the English economist R. Cantillon, who first introduced the term "entrepreneur" into economic theory. According to Cantillon, an entrepreneur is a person with uncertain, non-fixed income (a peasant, an artisan, a merchant, a robber, a beggar, etc.). He buys other people's goods at a known price, and sells his own at a price unknown to him. It follows that risk is the main distinguishing feature of the entrepreneur, and his main economic function It consists in bringing supply in line with demand in various commodity markets.
To characterize entrepreneurship as economic category the central problem is the establishment of its subjects and objects. Business entities can be, first of all, private individuals (organizers of sole, family, as well as larger production). The activities of such entrepreneurs are carried out both on the basis of their own labor and with the involvement of hired workers. Entrepreneurial activity can also be carried out by a group of persons linked by contractual relations and economic interests. The subjects of collective entrepreneurship are joint-stock companies, rental collectives, cooperatives, etc. In some cases, the state represented by its relevant bodies is also referred to as business entities. Thus, in a market economy there are three forms entrepreneurial activity: state, collective, private, each of which finds its "niches" in the economic system.
The object of entrepreneurship is the implementation of the 1 most efficient combination of factors of production in order to maximize income. Entrepreneurs combine resources to produce a new good unknown to consumers; discovery of new production methods (technologies) and commercial use of existing goods; development of a new market; development of a new source of raw materials; carrying out reorganization in the industry to create their own monopoly or undermine someone else's.
For entrepreneurship, as a method of managing the economy, the main condition is the autonomy and independence of economic entities, the presence of a certain set of freedoms and rights. The independence of the entrepreneur should be understood in the sense that there is no governing body, indicating what to produce, how much to spend, to whom and at what price to sell, etc. But the entrepreneur is always dependent on the market, on the dynamics of supply and demand, on the price level, i. relations.
The second condition for entrepreneurship is responsibility for the decisions made, their consequences and the risk associated with it. Risk is always associated with uncertainty and unpredictability. Even the most careful calculation and forecast cannot eliminate the unpredictability factor; it is a constant companion of entrepreneurial activity.
The third sign of entrepreneurship is the focus on achieving commercial success, the desire to increase profits.
Entrepreneurship as a special type of economic thinking is characterized by a set of original views and approaches to decision-making that are implemented in practice. The personality of the entrepreneur plays a central role here. Entrepreneurship is not an occupation, but a mindset and a property of nature. Production function, the concept of diminishing productivity of production factors, theory ultimate performance.
Having considered the factors of production, we now proceed to analyze the process of production itself as the interaction of factors of production. The problems associated with the production of products can be divided into three levels:
- 1) the entrepreneur may be faced with the question of how to produce a given quantity of products at a particular enterprise. These problems relate to the issues of short-term minimization of production costs;
- 2) the entrepreneur can decide on the production of the optimal, i.e. bringing the greatest profit, the number of products at a particular enterprise. These questions are about short-term profit maximization;
- 3) the entrepreneur may be faced with the task of finding out the most optimal size of the enterprise: such questions relate to long-term profit maximization.
There is no doubt that the production of products requires the interaction of all factors of production, and none of them taken separately is capable of producing a product and generating income. However, it is also impossible to determine exactly how much a product owes its creation to one or another factor of production. Indeed, in the process of production, factors continuously interact with each other, complement, and sometimes replace each other.
In the case of a specific production, the entrepreneur is always interested in the question of what the output will be if a given number of production factors participate in the production process. At a certain stage in the development of technology and labor productivity, given the costs of factors of production, a certain maximum output can be achieved. The relationship between the number of factors of production used and the maximum possible output is called the production function. The production function is a technical ratio that reflects the relationship between the total cost of production factors and the maximum output. In the language of mathematics, it can be written as follows:
Y = f (a1, a2…an),
where Y is the number of products produced; a1, a2…an are factors of production.
The demand for a factor of production depends on its marginal productivity. The marginal productivity of a factor is the increase in total output with an increase in this factor by one. Imagine a weaving factory where, according to technology, one weaver serves ten looms. However, you can try to increase the number of machines, leaving the same number of weavers. Of course, the growth of the machine park will lead to an increase in output, but the weaver will not be able to serve twelve machines as well as ten, and fifteen as well as twelve. Therefore, despite the overall increase in production, the increase in output from each subsequent machine will be less than from the previous one. The opposite situation can also be imagined: without increasing the number of looms, increase the number of weavers. Then each weaver will serve fewer machines, and she will do it better, although the productivity of the machines is limited, so the output per weaver will be reduced.
This example brings us to an important conclusion: certain level knowledge and technology, an increase in the investment of one factor of production with a constant number of other factors leads to a decreasing productivity of this factor of production (Fig. 1).
The graph in fig. 1 illustrates a situation where one factor is variable (labor) and the other is constant (capital, in this case machines). Initially, the marginal (additional) product (MP) has a certain tendency to increase - after all, two or three weavers will serve the machines better than one weaver. But as the hiring of women workers increases (with the machine park unchanged), the marginal product will begin to decrease, since an increasing amount of the variable factor (labor) will be combined with an unchanged amount of capital. The hiring of female workers will continue up to a certain limit. This limit is the prevailing level of the market price of labor, i.e. wages. This level will tell the entrepreneur that it is necessary to stop hiring on that worker whose marginal product in monetary terms is exactly equal to wages. In this case, this is the number of workers in the amount of n people. marginal product nth worker(it is shaded) corresponds to wages (W). The marginal productivity of the nth worker is a measure of the contribution of labor (L) to the production of a product.
Let us assume that the price of a unit of output is $2, and the prevailing level of wages in this industry is $600. Then (under the conditions perfect competition in the labor market) only when the 4th employee is hired, the following rule will be observed:
i.e., in our example, the MRP is $600 ($300x2), which corresponds to a wage of $600.
The concept of marginal productivity helps to solve the problem of minimizing production costs when two factors are variables - both labor and capital. To find the optimal combination of machines and weavers in the factory in our example, it is necessary to compare the physical volume of the marginal product of labor with the price of labor, and the physical volume of the marginal product of the machine with the price of the machine. It is advisable to replace one factor of production with another until the physical volume of the marginal product of the factor of production is proportional to the price of this factor:
Rational economic behavior assumes that an "expensive" factor of production will be replaced by a "cheap" one. The given equality shows the limits of this substitution.
Let us give an example of a graphical representation of the production function and the law of substitution of production factors. Suppose that 100 units of some product can be produced using various combinations of labor and capital, with a wage of 1 worker of $2 and a unit cost of capital of $3. Let's write down all the data we know in the table:
An example of a combination of factors in a production function
Any combination of factors of production, for example, 6K and 1L, 3K and 2L, 2K and 3L, 1K and 6L will provide the same physical volume of production. But what combination will be the cheapest for an entrepreneur? Given the data in this table, Fig. 2 we will construct an equal product curve, or a production indifference curve (isoquant). All points of this curve A, B, C, D show a different combination of factors of production for the production of 100 units of output.
Isocosts are constructed as follows. Let us assume that the price of a unit of capital is $3 and that of a unit of labor is $2, as previously assumed. If the entrepreneur's entire budget is $3, then by spending all the money on capital alone, he can buy 1 unit. this factor. If he spends all the money only on labor, he will be able to acquire 1.5 units. labor. Now you can connect two points: one of them lies on the y-axis, i.e. 1 unit. capital, the other - on the x-axis, i.e. 1.5 units. labor. This line is the isocost of $3. Each point on this line shows a different combination of K and L, but the total cost will be the same, $3.
Now in fig. 4 compatible equal product curve with multiple lines equal cost. At point C, where the equal product curve touches (but does not intersect) one of the equal cost lines, the cost of production will be minimal. Thus, with a unit price of capital of $3 and a unit price of labor of $2, the optimal combination of physical units of capital and labor would be: 2 units of capital and 3 units of labor. The indifference curve has touched exactly the isocost at point C, which is $12 (2Kx3 dollars) + (3Lx2 dollars) = $12. Any other combination of factors of production will cost more, for example, 6K and 1L.
The entrepreneur is concerned not only with the issue of minimizing costs, but also with the issue of maximizing profits. Since different quantities of products can be produced at the lowest cost, the question arises: what volume of products will bring the maximum profit? And what combination of factors of production will provide the maximum profit?
The answer to these questions is easy to give, remembering the rule for the use of resources (in our example, hiring labor). The firm receives the maximum profit if it involves in production such a number of workers that ensures the equality of MRP (labor) and W, where W is the price of labor, or wages. This value can also be denoted as P L (labor price).
The same principle is preserved when additional units of capital are involved in production, i.e. MRP (capital) = Pc, where the symbol Pc denotes the price of capital.
So, the maximum profit will be provided under the condition:
This equation expresses the following regularity: including in production an additional amount of land or labor, purchasing machinery, equipment, raw materials, an entrepreneur must adhere to the rule to maximize profits: the income from the marginal product received through the additional investment of any factor of production must be equal to market price this factor.
Compliance with this rule indicates that production is carried out in an efficient manner and there are no losses in the use of production factors. In this regard, in positive economic theory, the very concept of labor exploitation does not exist, since the price of labor is equal to the income from the marginal product of labor.
Entrepreneur's profit
Entrepreneurship is an essential attribute of a market economy. Although the history of entrepreneurship goes back centuries, its modern understanding was formed during the formation and development of capitalism, in which free enterprise serves as the basis and source of prosperity. But only at the turn of the XIX and XX centuries. economists have recognized the crucial importance of this factor of production for economic progress. Alfred Marshall added to the three classical factors of production - labor, capital and land - the fourth - organization , and Joseph Schumpeter in his book "The Theory of Economic Development" gave this factor its modern name - entrepreneurship.
Schumpeter called an entrepreneur an organizer of production who paves new ways, implements new combinations: "To be an entrepreneur means to do not what others do ... and not in the way others do."
J. Schumpeter attributed to the functions of an entrepreneur:
1) the creation of a new, yet unfamiliar to the consumer material good or a former good, but with new qualities;
2) the introduction of a new method of production that has not yet been used in this industry;
3) the conquest of a new market or the wider use of the former;
4) the use of a new type of raw material or semi-finished products;
5) Introduction new organization affairs, for example, monopoly or, conversely, overcoming it.
Struggling with the routine, carrying out the implementation of innovations and thereby ensuring economic growth, the entrepreneur becomes, according to Schumpeter, "a creative destroyer."
The object of entrepreneurship is the implementation of the most efficient combination of factors of production in order to maximize income. The creation of all kinds of new ways of combining economic resources, according to J. Schumpeter, is the main task of an entrepreneur and distinguishes him from an ordinary business executive.
AT contemporary literature It is customary to single out three functions of an entrepreneur.
The first function is resource. For any economic activity objective factors (means of production) and subjective, personal factors (workers with sufficient knowledge and skills) are needed.
The second function is organizational. Its essence is to ensure such a combination and combination of factors of production that best contributes to the achievement of the goal.
The third function is creative, associated with organizational and economic innovation. The importance of this function for business has increased dramatically in the context of modern scientific and technological progress and the development of non-price competition.
To successfully perform these functions, a person must have certain abilities, among which there must be initiative, the ability to think independently and make decisions, perseverance in achieving goals, the ability to organize and lead a team.
The remuneration for the services of an entrepreneur is profit . In economic theory, there are several approaches to determining the sources of profit generation.
According to the first of them - accounting, profit is interpreted as the difference between the income received by the enterprise from the sale of goods and the expenses incurred by it in the course of production and marketing activities. Thus, unlike wages, interest, and rent, profit is not a peculiar equilibrium price established in a contractual manner, and acts as a residual income. This view was not established in science immediately. Profit for a long time was not distinguished from wages and interest on capital.
Modern economists interpret profit as a reward for performing the functions of an entrepreneur, i.e. as income from the entrepreneurial factor. Thus, under the net (economic) profit in economic theory it is customary to understand the excess over the interest rate, over rent payments, over the wage rate, over normal entrepreneurial profit. This is a kind of "entrepreneur's salary".
Profit is often viewed as a kind of payment for the risk that entrepreneurial activity involves.
Finally, profit is treated as monopoly income. A large firm can get it by setting higher prices in the market, and, consequently, by conquering this market and turning perfect competition into imperfect.
A specific estimate of profit can be made as the difference between the total income of the enterprise and its total costs. In other words, profit can be defined as net income or income excluding costs and taxes. Therefore, when statisticians calculate profits, they usually add up the total cost of sales of the enterprise (revenue) and subtract all costs from it ( wages, cost of materials and energy, rent, interest on loans, etc.), as well as taxes.
Thus, entrepreneurial income (economic profit) consists of two parts:
1) the normal profit of the entrepreneur, which is part of the internal (opportunity) costs, which is minimum income necessary for the continued functioning of the company in the chosen field of activity;
2) the net income of the entrepreneur - the part of the profit remaining at the disposal of the entrepreneur after the payment of interest on the loan.
An important indicator characterizing the economic performance of the firm is rate of return – the share of profit in sales proceeds or the share of profit in the price of the product.
In any case, the hope of making a profit is a stimulus for technical progress, the redistribution of capital among the branches of production. The expectation of profit stimulates the most efficient distribution and use of resources, the reduction of production costs, the development of new technologies, the growth of investment in the economy, the increase in production and employment, and ultimately economic growth and better satisfaction of people's needs. As J. Schumpeter said, "without development there is no profit, without profit there is no development."
Even now, promising areas of entrepreneurship for the 21st century have been identified in Western countries. Thus, in Japan, the emphasis is on information business, in Germany, Great Britain and France - on industrial technologies (it is believed that one who is strong in industrial production, will be successful in all areas of science and technology). In the United States, the focus is on increasing the intellectual level of workers, their education and qualifications, because the technological potential of a business depends on this.
Similar information.
ESSAY
By discipline: "Economics"
TOPIC: "Entrepreneurship as a factor of production"
Performed:
Checked:
Vladimir 2010
Introduction ___________________________________________________ 3str
I. Entrepreneurship
1.1 The history of the formation of entrepreneurship _______________4str
1.2 Functions of Entrepreneurship
1.3 Characteristic features of entrepreneurship and its features ___ 11str
1.4 Entrepreneur and his role in the economy _______________ 13str
II. Forms and types of entrepreneurship _________________________ 15str
2.1 The essence of industrial entrepreneurship.___________15str
2.2 Forms of entrepreneurship______________________________19str
Conclusion____________________________________________________________ 22str
List of used literature _____________________________ 23str
INTRODUCTION
Entrepreneurship is one of the most important subjects of study of economic science, since it is the entrepreneur who is the main actor in a market economy. Without this type of activity there can be no efficient economy, no market. Get on the path market development, we must inevitably create conditions for the revival and development of entrepreneurship. At the same time, the modern development of entrepreneurship is associated with many negative phenomena, it is in the area of close criminal attention. Further development market relations associated with the creation favorable conditions business development in our country.
In my work, I want to address such issues as:
1) The history of the formation of entrepreneurship. And different approaches to the definition of entrepreneurial activity and entrepreneur;
2) Functions of entrepreneurship;
3) Characteristic features of entrepreneurship and its features;
4) Entrepreneur and his role in the economy;
5) Forms and types of entrepreneurship;
6) The essence of industrial entrepreneurship.
I. ENTREPRENEURSHIP
1.1 The history of the formation of entrepreneurship. Different approaches to the definition of entrepreneurial activity and entrepreneur.
The history of entrepreneurship begins in the Middle Ages. Already at that time, merchants, merchants, artisans, missionaries were beginning entrepreneurs. With the rise of capitalism, the desire for wealth leads to the desire for unlimited profits. The actions of entrepreneurs are taking on a professional and civilized character. Quite often the entrepreneur, being the owner of the means of production, also works in his own factory, in his own plant.
From the middle of the XVI century. share capital appears, joint-stock companies are organized. The first joint-stock companies arose in the field international trade. The very first was founded by the English trade company for trade with Russia (1554). Later, in 1600, the English East India Trading Company was established, in 1602 the Dutch East India Company, and in 1670 the Hudson's Bay Company. In the future, the joint-stock form of management penetrates into other sectors of the economy.
At the end of the XVII century. the first joint-stock banks appear. So, in 1694, the Bank of England was founded on a joint-stock basis, in 1695 - the Bank of Scotland. At the end of the 18th and beginning of the 19th centuries the joint-stock form of the organization of banking is widely developed in many countries. During this period, the property of previously existing large family firms breaks up into hundreds, thousands of shareholders. The gap between the small and big business. In such conditions, it becomes more and more difficult for small firms to survive, they are unable to innovate, but medium and large firms are widely developed. The motive for receiving is getting louder maximum profit. During this period, a new profession appears - manager-leader and organizer of large-scale production. Entrepreneurial functions, previously concentrated in one person, are divided into specialized areas. There are financiers, economists, accountants, lawyers, designers, technologists. Above all of them, as it were, rises the manager, freed from many functions and focused on the management and organization of production.
Entrepreneurship has existed in Russia since ancient times. It originated in Kievan Rus in the form of trade and in the form of crafts. Small merchants and merchants can be considered the first entrepreneurs in Russia. The greatest development of entrepreneurship refers to the years of the reign of Peter I (1689-1725). Manufactories are being created all over Russia, such industries as mining, weapons, cloth, and linen are rapidly developing. The most famous representative of the dynasty of industrial entrepreneurs at that time was the Demidov family, whose ancestor was a Tula blacksmith.
The further development of entrepreneurship was held back by the existence of serfdom. The reform of 1861 became a serious incentive for the development of entrepreneurship. Construction begins railways, heavy industry is being reorganized, joint-stock activities are being revived. Foreign capital contributes to the development and reorganization of industry. In the 90s of the XIX century. in Russia, the industrial base of entrepreneurship is finally taking shape. At the beginning of the XX century. entrepreneurship is becoming a mass phenomenon in Russia, the entrepreneur is formed as an owner, although the influence of foreign capital and the state remains significant.
During this period, the market work force, the joint-stock form of entrepreneurship is developing, private joint-stock banks are opening: commercial, land, etc. By the beginning of the 20th century. in the Russian economy, 2/3 of all industrial products were produced in joint-stock, share and other collective forms of entrepreneurial activity, and only 1/3 fell on individual forms.
Investments in cotton production, trade and credit were especially profitable. The process of monopolization of firms began. Among large firms Prodamet, Prodvagon, Produgol, partnerships of the Russian-American Manufactory, the Nobel brothers, and others are known.
Unfortunately, in Russia after the end of the First World War and the completion of two revolutions - February and October - a course was taken to eliminate market economic ties. All large enterprises were nationalized, the means of production and the property of all private entrepreneurs were expropriated.
Some revival in entrepreneurial activity was introduced by a new economic policy- NEP (1921-1926). However, since the late 1920s Entrepreneurship is again curtailed and only in the 1990s. began his resuscitation in Russia. In October 1990, the Law "On Property in the RSFSR" was adopted, in December 1990 - the Law "On Enterprises and Entrepreneurial Activity". From the moment when private property and entrepreneurial activity were restored in their rights, the development of joint-stock companies, partnerships, and other forms of enterprise activity began.
What is meant by the terms "entrepreneur" and "entrepreneurship"?
These concepts in the modern sense were first used by an English economist of the late 17th - early 18th centuries. Richard Cantillon. He expressed the opinion that an entrepreneur is a person acting in conditions of risk. R. Cantillon considered the source of wealth to be land and labor, which determine the real value of economic goods. In 1797, Baudot considered the entrepreneur as a person responsible for the undertaking; one who plans, controls, organizes and owns an enterprise.
Later, the famous French economist of the late XVIII - early XIX centuries. J. B. Say (1767-1832) in the book "Treatise of Political Economy" (1803) formulated the definition of entrepreneurial activity as a combination, a combination of three classical factors of production - land, capital, labor of entrepreneurs, was one of the success factors. Say's main thesis is to recognize the active role of entrepreneurs in creating a product. An entrepreneur, he pointed out, is a person who undertakes at his own expense and risk and for his own benefit to produce some product.
English economists A. Smith (1723-1790) and D. Ricardo (1772-1823) represented the economy as a self-regulating mechanism. There was no place for creative entrepreneurship in such a mechanism. At the same time, in his main work "A Study on the Nature and Causes of the Wealth of Nations" (1776), A. Smith paid attention to the characteristics of the entrepreneur. An entrepreneur, according to A. Smith, being the owner of capital, takes risks in order to implement a certain commercial idea and make a profit, since capital investments in a particular business always contain an element of risk.
D. Ricardo saw in capitalism an absolute, eternal, natural mode of production, and considered entrepreneurial activity as an indispensable element of effective management. And only at the turn of the XIX-XX centuries. understanding of the importance and role of the institution of entrepreneurship begins.
And here is how the concept of "entrepreneurship" is interpreted in the Encyclopedic Dictionary of an Entrepreneur:
“Entrepreneurship is an initiative independent activity of citizens aimed at making a profit or personal income, carried out on their own behalf, under their own property responsibility or on behalf of and under legal responsibility. legal entity. An entrepreneur can carry out any types of economic activities not prohibited by law, including commercial mediation, trade, procurement, consulting and other activities, as well as transactions with securities».
1.2 Functions of entrepreneurship
Entrepreneurship is an integral component of the market economy. Distinctive feature entrepreneurship as a factor of production is the presence of free competition. Today's understanding of this term has specific features associated with the economic realities of society.
Term Features
The concept of entrepreneurship as a factor of production appeared in modern economy. In connection with privatization, only part of the enterprises remains in the hands of the state, all the rest have passed into private ownership. For example, medium and small businesses are represented in Russian entrepreneurship.
The main task of any entrepreneur is the full-fledged management of the enterprise, which includes the reasonable use of resources, the organization of work based on innovation, and responsibility for the final results of one's own activities.
Features of entrepreneurship
Entrepreneurship as a factor of production is associated with the social economy, certain conditions activities. The environment for full-fledged work is a combination of personal interest, economic freedom. It is she who is considered the main feature of the entrepreneurial environment.
It is no coincidence that entrepreneurship is called the fourth factor of production, because it is it that ensures the development of the market, affects economic condition countries. The driving motive for the development of entrepreneurship is self-interest.
The process of transition to the market version of management presupposes the emergence of an entrepreneurial economy.
Let us find out what is the specificity of entrepreneurship as a factor of production. To do this, consider the specifics of this term. Its essence lies in the ability of economic entities to influence the alleged source of material gain.
Entrepreneurship is proactive, having an economic risk, aimed at identifying the best ways to use resources by activities. It leads to additional profit, an increase in property.
Entrepreneurship as a factor of production is the link between the product and the market economy. It manifests itself in extracting the maximum benefit from the sale of the finished product. In order for a simple exchange to become a source of entrepreneurship, it must become an integral part of the systemic economic turnover, a function of economic entities.
Exchange: features, importance
It is the exchange that stimulates the search for new opportunities, characterizes entrepreneurship as a factor of production. In the modern economy, it helps to find a source of potential benefits, is considered as a motive for successful activity.
By exchanging products with others, the entrepreneur perceives work not only as a way to make a profit, but also as an opportunity to establish personal contacts.
Entrepreneurship - as a combination of factors of production - implies a social character, the interconnection of many factors.
signs
What are the main features and factors of production? Labor, land, entrepreneurship, profit - all these terms are interconnected. There are certain signs that characterize the economic nature modern entrepreneurship Keywords: commercial risk, initiative, responsibility, innovation, combination of production factors.
Such activity is impossible without initiative. Only a constant desire to look for something new can contribute to its development. For example, mastering innovative technologies, markets for products, is a condition for the functioning of entrepreneurship.
Modern entrepreneurship as a factor of production involves the realization of those opportunities that are provided by the process of market exchange, which implies the mutual benefit of all participants in the process. Many analysts view entrepreneurship as a factor of production. The profit of the entrepreneur should not be the result of deceiving consumers, but the result of honest and fruitful work.
Despite the fact that the initiative is considered an integral quality of the human personality, it is not manifested in all people. The very nature of the market form of management contributes to the development of this quality among those who are involved in commercial activities.
Modern entrepreneurship as a combination of factors of production implies a certain economic freedom based on information.
It is necessary to have reliable information about prices, changing market conditions, consumer preferences in order to respond in a timely manner to market fluctuations.
Commercial risk
The reality surrounding the modern entrepreneur is an uncertainty beyond his control, so there is a commercial risk.
Considering entrepreneurship as a factor of production, let us briefly dwell on the characteristics of commercial risk. Despite the fact that it is considered a component of management, it involves a sober calculation, analysis and consideration of all possible negative consequences from actions and transactions.
To get real profit from risky transactions, an entrepreneur conducts serious analytical work, attracts specialists who are able to assess possible risks.
It is quite possible to imagine entrepreneurship as a factor of production, an opportunity for the development of society. In order to reduce the risks that accompany such activities, you can use insurance. When it comes to creating an innovative product, the developer has significant problems with a reliable assessment possible risk. To solve this problem, you can combine your efforts with other persons interested in obtaining maximum profit. In this case, not only the income from the sale of the created product will be divided, but also the possible production risks will be evenly divided.
Entrepreneurship, as a factor in the production of new goods and services, is the driving force behind technological progress.
Risk management system
In order to avoid contradictions between the desire to minimize risk and a motivated desire for it, a system for managing such situations is being created that reflects entrepreneurship as a factor of production. The essence and features of such a system:
- search for sources of risk and possible consequences entrepreneurial activity;
- development and implementation of adaptive measures aimed at overcoming undesirable consequences.
The risk also has a certain general economic significance. Its presence forces the owner of the company to carefully study all possible alternatives, choose the most promising ways to lead to progressive actions, increase output, which characterizes entrepreneurship as a factor of production. Briefly, we can consider commercial risk as a way of progressive shift of productive forces, effective change and expansion of the economy.
Arbitration
How can the factors of production be effectively changed? Labor, land, capital - entrepreneurship calls the main components of a full-fledged activity. To solve this problem, resources are being moved to markets where they can generate a large income. Arbitrage can be identified in exchange activity and in trading. This process is characterized by the following parameters:
- the use of non-equilibrium market situations as a source of new opportunities;
- search for a rational distribution of resources as an opportunity for additional income;
- establishment of market equilibrium through the redistribution of material wealth.
In addition, to improve the efficiency of the enterprise, they combine factors of production, for example, modernize hard labour. Information is a factor of production. Social infrastructure, entrepreneurship - concepts that complement each other. Without their combination, there will be no economic growth, positive development of society.
With the rational replacement of one production factor with another, the entrepreneur not only guarantees a transition to a more efficient use of the resource, but also to the use of new technologies that can significantly simplify hard work. Information is a factor of production.
Social infrastructure - a new type of entrepreneurship that allows you to get the desired profit - is accompanied by high-quality and affordable services for the population. Combining the "principle of substitution" with the "spirit of rationalism" is feature modern entrepreneurship, its distinctive characteristic.
Motives and goals of entrepreneurship
Since such activity is aimed at meeting the needs of society, it is expressed not only in obtaining material income by the entrepreneur himself, but also in obtaining satisfaction from consumers.
Not every income can be considered the result of a full-fledged entrepreneurship. It acts as such only in situations where it assumes the best result of the use of factors of production. That is why interest on capital, profit from rent is not considered as income from entrepreneurial activity.
What is the main goal of the modern entrepreneur? The hypothesis, according to which it consists only in maximizing profits from sales, is refuted by analysts.
After a significant modernization of the structure of firms, there were dispersed functional signs between participants in the business process. Therefore, the purpose of the activity is based on the influence of the interests of representatives of different parties who are actively involved in the implementation of the entrepreneurial function. We have to constantly respond to all external changes, adapt to the market situation, based on differentiation, concretization of attitudes towards medium-term, short-term, long-term forecasts.
The result of such work is the modification of the actions of the entrepreneur, the development of new market segments, the increase in sales, the economic growth of the company.
Of course, the new realities do not mean that profit ceases to be the target of modern entrepreneurship. Despite the differences in the goals of different firms, any of them is acceptable only if a reasonable minimum benefit is provided. Such a limitation is far from accidental, because it is profit that is important for the development of production, the launch of new technologies, and the development of innovative products.
The business owner always strives to create ideal conditions for the development and full implementation of the entrepreneurial function. Its task is to balance the forces that make it possible to effectively carry out the entrepreneurial function in the long term. As well as ensuring maximum profitability from the resources used.
Entrepreneurship development
It is not considered a frozen and formed phenomenon. There is a constant change in the form, content, scope of this term. Entrepreneurship is associated with the state of the market economy, as well as with numerous social aspects. Trade has always been his starting point. Merchants assessed the demand for products and correlated it with their capabilities, made adjustments depending on changes observed in the market.
The main source of income in those days was the difference in price received when selling the same product in different markets. This option assumed serious rice, therefore, when the demand for goods fell, the merchants went bankrupt and completely lost their production.
During the transition to industrial production, industries began to be considered as a priority area for entrepreneurship. material production. Instead of attractive markets for sales, attention began to be paid to the rational use of various factors of production. At this stage, the entrepreneurial function ceased to be the monopoly of the owner.
The post-industrial stage was characterized by the growth of non-material activity, socialization, which caused new priorities and guidelines in management. Particular importance in entrepreneurial activity began to be given not to adaptation to constantly changing market conditions, but to the transformation of the essence of management, anticipation of the prospects for the development of social production.
Apart from rational use resources, the forms of their use began to act as the key activity of the entrepreneur. As new areas that began to cover the activities of business executives, we single out science and finance. Setting strategic goals allows you to maximize the result obtained by mobilizing efforts to involve many participants in the entrepreneurial process.
In any historical era, entrepreneurship has been an indispensable element of a market economy. It is also customary to consider it as an economic category, a type of economic thinking.
To assess the relationship of entrepreneurship with the economy, it is necessary to note the existence of a relationship between objects and subjects. The latter types can be not only individuals, but also representatives of large-scale production, who work independently or involve other persons in the activities. For example, cooperatives, rental collectives, joint-stock companies engaged in a certain type of economic activity are being created.
In a market economy, private, collective, and also state entrepreneurship is possible.
The object is the most efficient combination of production factors, which allows minimizing costs and increasing income.
Thanks to a variety of new combinations of economic resources, improved technological processes, the search for new technologies, the entrepreneur is constantly changing his production, has advantages over the usual business executive.
The main condition for the fruitful work of small or medium-sized businesses is independence, complete independence of the subjects, the formation of an algorithm of work, the choice of sources of financing, the method of marketing finished products, rational disposal of profits.
Conclusion
AT modern conditions entrepreneurship is the driving force for the economy. The entrepreneur constantly depends on the market, the dynamics of supply and demand, the price level, commodity-money relations. Due to the high risk associated with constant fluctuations in the economy, many entrepreneurs are forced to close their production facilities or do not have the opportunity to develop their business, they are forced to “stagnate” in order to withstand competition.
In countries with high entrepreneurial potential, medium and small companies are of particular importance. For example, in the USA they are considered a "forge" of personnel, therefore they are supported by various government programs.
In our country, entrepreneurial potential is characterized by an intermediate state of the economy. Russia has already shown its ability to create an entrepreneurial infrastructure, but there are still many tasks to be solved before the share of small and medium-sized businesses becomes significant and noticeable on a national scale.
There are no real programs that would have a positive impact on the development of domestic entrepreneurship yet. This is what negatively affects the speed of the spread of entrepreneurship at the initial and middle levels, and is the cause of “stagnation” in the economy.
With effective measures state regulation economy, it is possible to stimulate the development of the market, increase the quality and standard of living of the population of the country. Otherwise, it will be difficult to talk about positive changes in the social, political, scientific sectors, about economic stability.
Regardless of the form of ownership used in the state, the main engine of the development of society has always been trade, represented in our time by entrepreneurship.