Entrepreneurs development in future 2050

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Tables of contents

1.     Background of the topic…………………………………………………………………………….. 2

2.     Objective of the report……………………………………………………………………………….. 2

3.     The world in 2050……………………………………………………………………………………… 3

3.1           Labor market………………………………………………………………………………… 3

3.1.1     Labor force explosion and increased demand for entrepreneurship.. 3

3.1.2     Critical discussion: Implications to entrepreneurs in 2050…………….. 4

3.1.2.1 Business opportunities in the labor intensive industry…………… 5

3.1.2.2 Source global top talents from the developing countries……….. 5

3.2           Food market…………………………………………………………………………………. 6

3.2.1     Increased food demand and possible food shortage in 2050………… 6

3.2.2     Critical discussion: Implications to entrepreneurs in 2050…………….. 6

3.2.2.1 Higher cost in the agricultural and sideline food processing industries 6

3.2.2.2 More business opportunities in the low cost food products……. 7

3.2.2.3 Business opportunities in the new agriculture technologies……. 7

3.3           Some economies & market forecasting…………………………………………….. 8

3.3.1     China – with an agent population in 2050………………………………….. 8

3.3.2     India – 2nd largest economy in 2050………………………………………….. 9

3.3.3     The United States…………………………………………………………………… 9

4.     Conclusions…………………………………………………………………………………………….. 10

Reference……………………………………………………………………………………………………… 11

 

Assignment 1

Discuss what you think the world has in store for entrepreneurs in 2050? (3000 words)

 

1.        Background of the topic

 

According to Burgelman (1983), the term corporate entrepreneurship could be defined as the process whereby the firms focus on the diversification by internal development which needs new resource mix to expand the business into the irrelevant or marginally fields. Similarly, corporate entrepreneurship could also be referred as the extent to which new product and/or new markets are developed and based on this view an organization is entrepreneurial if it develops a higher that average number of new products and/or markets (Jenning & Lumpkin 1989, p. 489). Accordingly, entrepreneur refers to a person who is a visualiser, creator, organizer and innovator (Joseph 2003, p. 1). When it is known to us that entrepreneurs bring in a great deal of value to the companies because entrepreneurs have different ways of thinking, and attitude in term of promoting changing from within, with the rapid changes happening around the globe, there are already discussions and predictions regarding how the world would look like in the middle of this century in term of entrepreneurial management. For example, the 2010 edition of the world Entrepreneurship Forum is about “shaping the world of 2050 with an entrepreneurial impact” (kpmg.com 2010).

 

2.        Objective of the report

 

This assignment will focus on studying the topic of “what the world has in store for entrepreneurs in 2050”, in other words, the report will try to answer the question about what the business world would look like in 2050 which set the fundamental environment in which the entrepreneurs to continue to perform their roles and lead the innovation and changes in various industries.

3.        The world in 2050

 

3.1    Labor market

 

3.1.1            Labor force explosion and increased demand for entrepreneurship

 

 

Figure 1 Labor force growth prediction in developed and developing countries
Source: United Nations 2009

For a long period in the human history, the global population was growing just very slowly from about 2.5 million at the beginnings of urbanization to some 50 million around the time middle ages. During the last century, the population of the whole world grew nearly fourfold from 1.6 billion to 6 billion marking an explosion in the population. And the trend of explosion of the overall according to the prediction of the United Nations is expected to grow continuously in the first half of the 21 century. And according to the latest predictions from the UN estimate a higher population growth than previously of 9.3 billion by 2050 and over 10 billion by 2100 with higher rates possible (Dhushara.com 2011).

The growth of the population which concentrates in the developing countries will lead to a serious problem which is the employment issues of the increased labor force. As we can see from the prediction in the figure above, the developing economies will maintain the growth momentum when the developed countries and China seem to be able to have a slowly growing or even reducing labor force in the coming four decades. Though the world economy is growing as well, the anticipating unemployment issue caused by the rapid labor force growth could still happen if the economy growth pace is lagged behind. To resolve this challenge, Zoltán J. Ács and Laszlo Szerb (2011, p. 1) provide an solution by turning to a combination of innovation and entrepreneurship in the book Global Entrepreneurship and Development Index 2011, according to their finding, the research on economic growth during the past thirty years’ time has significantly supported that fast job creation comes from fast growing firms. And many of the rapidly growing companies are successful by targeting the niche markets and provide innovative goods and services that have not been widely copied by the competitors. This is also in accordance with Porter’s generic strategy (1980) which suggested that there are three potentially successful generic strategic approaches to outperforming other firms in an industry, they are: overall cost leadership, differentiation and focus strategy (Botten 2008, p. 275) because the many fast growing companies provide products that are well positioned in the market. Thus the larger labor forces would an increasing demand for more entrepreneurs who can create new business, new companies and new industries that are highly competitive and could help to abort the large labor force into the market and push forward the economy development of the world.

 

3.1.2            Critical discussion: Implications to entrepreneurs in 2050

 

3.1.2.1      Business opportunities in the labor intensive industry

 

As we have analyzed above, there will be an expanding labor force in the major developing countries in 2050 except the case of China that has effective control policy over the birth rate, in this point, there will be continual business opportunities in the labor intensive industries which refers to industries that require substantial amount of human labor to produce the industrial products (Boyes & Melvin 2011, p. 435). Because there are more and more people in the developing world in their labor age, and taking into consideration that the majority of them could be less educated and unskilled, the entrepreneurs could use the low cost and unskilled large pool of labor force as core competitiveness to develop businesses in the labor intensive industries. For example, in 2050 because of the large amount of low cost labor forces, entrepreneurs could still seek business opportunities in industries such as crops growing in agriculture industry, textile industry and building and construction. It is wrong for us to understand the world in 2050 as everything will be very high technological and advanced, some basic needs will still be provided using a large number of labor forces.

 

3.1.2.2      Source global top talents from the developing countries

 

As entrepreneurs tend to work in teams and groups rather than individually, entrepreneurs also care about those top persons who will work with them, with an expected decline in the major developed economies and China which will still be the one of the top most populous countries in 2050 it would be recommended that entrepreneurs could source global top talents from the developing countries because there will be a bigger labor force. In my understanding, the massive labor forces in the developing countries will cultivate quality talents because the survivors in the high competitive labor markets tend to be competitive, resilient and hard working. And these are very good team members to work with for the entrepreneurs in 2050.

3.2    Food market

 

3.2.1            Increased food demand and possible food shortage in 2050

 

With a fast growing population which has just been discussed, there will be absolutely a rapid increase in the food demand in the world in 2050 along with the growth of the global population. Such increase in food demand will be more obvious in the developing countries than that in the developed economies as the fast growth of population happens basically in the third world. According to the Food and Agriculture Organization of the United Nations (FAO 2009), in term of the total food production, world will have to produce 70 percent more food for an additional 2.3 billion people by 2050. In contrast, the yield growth of the major agricultural products seems to be slowing down. According to the Science magazine, there is evidence that the growth rate in yields for major cereal grains and soybeans fell by half between 1961-1990 and 1990-2007 (Usda.gov 2010). The increasing demand together with the slowing growth in major agricultural products such as the corns has resulted in a food shortage which is anticipated in the next few decades. For example, by year 2020, it is expected that the developing countries will demand twice as much cereals and meat products as the developed countries, but the average person in the developing economies would only consume a half as much cereals and only a third as much meat as those in the developed countries (Pinstrup-Andersen, Watson, Frandsen, Kuyvenhoven & Braun 2011, p. 91).

 

3.2.2            Critical discussion: Implications to entrepreneurs in 2050

 

3.2.2.1      Higher cost in the agricultural and sideline food processing industries 

 

With the conclusion that there will be a large gap between the demand for food especially in the rising developing countries and the food production volume in the future, and it is widely accepted and predicted that if the overall production in major products such as corns could not increased significantly, food demand will exceed largely over the food supply resulting in severe food shortage and even food crisis. One direct result when the food shortage happens widely in 2050 to the entrepreneurs is there will be higher cost in the agricultural and sideline food processing industries because these industries reply on the agricultural products as raw materials to product other products. With a strong demand over the agricultural products, the price of these products will be increased because of the market competition, and then as the raw material cost is increased it will be more difficult to operate in the agricultural and sideline food processing industries. This could also be understood as the bargaining power of the suppliers is increased and thus the industry will become less attractive than it was before. Or the entrepreneurs could consider investing directly in the particular agricultural products in need to save up costs.

 

3.2.2.2      More business opportunities in the low cost food products

 

Though many people in the developing countries in 2050 will not be able to have their food demand met fully, probably many of them can not eat as they wish due to the constrain of their low income, their demand for basic food will still be there even many economies will consider their demand as ineffective demand because these customers could not afford to buy the needed products. Here one implication to the entrepreneurs is that they could exploit the lower end food products which is meaningful because such exploitation not only meets the need of the people’s demand for lower priced product but also it helps the companies to achieve new business opportunities.

 

3.2.2.3      Business opportunities in the new agriculture technologies

 

Because of the rapidly growing demand for the food and food related products, there will be more business opportunities in the investment of the new agriculture technologies that could help increase the output of the farms. But such investments will require the entrepreneurs to have better understanding of the industry and the development of the relative technologies.

 

3.3    Some economies & market forecasting

 

3.3.1            China – with an agent population in 2050

Table 1 The aging population in China, South Korea and region of Taiwan

Source: U. S. Bureau of the census, 2002

 

The demographic dividend[1] that China has now enjoyed as the world’s factory is not going to last long, as the figure above indicates, in year 2000 the most populous country had a population of older people of 116 million and 11.9 million oldest but there will be almost three times as many older people in China in 2050 than that in 2000 and the growth of the oldest category will be ten times. This aging population trend is enhanced by the birth control policy which is gradually reflected in the new century resulting in the current demographic dividend and it is because of this population agent trend, the Chinese social and economic environment will experience significant changes in 2050. According to Dudley L. Poston and Michael Micklin (2006, p. 54), one possible consequence of the aging population in China and also other countries with similar aging trend is the change that will happen in the extent to which the older population will be able to be supported economically and emotionally by the younger members. In term of the implications to the entrepreneurs, there could be business opportunities in the market of the older people in China which has not been well developed so far.

 

3.3.2            India – 2nd largest economy in 2050

 

There has been a long dispute over whether India will be able to replace China as the largest economy in the middle of this century, as the time approaches to 2012, the current economy data seem to clearer than before to support India’s rise but only as the second place in year 2050. According to a forecast by the consultancy group, Price Waterhouse Coopers, the Indian economy will register the second fastest growth between now and 2050 and emerge as the second biggest economy in the world by the middle of this century (indiatimes.com 2011). Considering the current economic conditions of India, in order to achieve the second largest economy entity in 2050, in my own understanding, rapid development would be seem in industries such as energy, transportation, telecommunication and education. And these industries provide a lot of opportunities to the entrepreneurs in the middle of this century in India.

 

3.3.3            The United States

 

Though both China and India seem to be able to pass the United States around the middle of this century in term of the economic scale, but it does not necessarily be a bad new for the United States people. Even though an eightfold jump in the per capita income of China and India will keep growth brisk despite demographic headwinds, they will not come to close to matching US living standards. Americans will be three times richer than the Chinese in 2050 (Telegraph.co.uk 2011). This is logical because the nominal GDP value does not actually indicate how the life would like actually and the United State with a much smaller population compared to that of China and India actually manages to give a much better life to its people than most developing countries and some developed countries. The higher living standard would have many implications to the business activities in the country to the entrepreneurs in the middle of this century. In my understanding there could be two possible implications: firstly, the United States as a more developed super power may still take the leadership in culture and fashion creation even in year of 2050 which means that many business opportunities could be obtained by checking the differences and gaps between the US and other rising developing countries; the second implication is that the United States consumers will still have stronger purchasing power than that of China or India, meaning to say many products would need to position to the specific markets and countries. For example, the market volume of the luxury good in the Unites States would still be larger than that of China though in 2050 the luxury market in China will be expected to growth rapidly.

 

4.        Conclusions

 

To conclude the above analysis with response to the questions regarding what the world has in store for entrepreneurs in 2050, there would be great business opportunities in 2050 because of the rapid growth of the world population and the new labor forces will join the world economy and contribute to the global value creation process and there is increasing demand for entrepreneurships to help resolve the employment issue of these labor forces which are largely allocated in the developing countries another trend that could provide business opportunities to the entrepreneurs is aging population; but still there are uncertainties such as the possible food crisis that could lead to political and economical instabilities.

 

 

Reference

 

Ács, Z. J. & Szerb, L. 2011, Global Entrepreneurship and Development Index 2011. Cheltenham: Edward Elgar Publishing Limited. p. 1

 

Botten, N. 2008, Enterprise strategy: strategic level, E3. Oxford: Elsevier. p. 275

 

Boyes, W. & Melvin, M. 2011, Microeconomics. Mason, OH: South-Western Cengage Learning. p. 435

 

Burgelman, J. 1983. Entrepreneurship and the outlook for America. New York, NY: The Free Press.

 

Dhushara.com 2011.The World Population ‘Bomb’. accessed on 20 Nov 2011 [online] available: http://www.dhushara.com/book/diversit/bomb.htm

 

FAO 2009. 2050: A third more mouths to feed. accessed on 20 Nov 2011 [online] available: http://www.fao.org/news/story/en/item/35571/

 

Indiatimes.com 2011. India will be 2nd biggest economy in 2050: PwC. Updated Jan 8, 2011. Accessed on 20 Nov 2011 [online] available: http://articles.timesofindia.indiatimes.com/2011-01-08/india-business/28372926_1_john-hawksworth-power-parity-indian-economy

 

Jenning, D. F. & Lumpkin, J. R. 1989, Functioning modeling corporate entrepreneurship: an empirical integrative analysis. Journal of management. 15 (3), p. 489

 

Joseph, S. 2003, Entrepreneurs of Kerala: a study on the socio-psychological background. New Delhi: Northern Book Center. p. 1

 

Kpmg.com 2010. Shaping the World of 2050 with an Entrepreneurial Impact Proceedings of the third World Entrepreneurship Forum Lyon, France, November 2010. accessed on 20 Nov 2011 [online] available: http://www.kpmg.com/FR/fr/IssuesAndInsights/ArticlesPublications/Documents/WorldEntrepreneurshipForum2010-Livre-Blanc.pdf

 

Pinstrup-Andersen, P., Watson, D. D., Frandsen, S. E., Kuyvenhoven, A. & Braun, J. V. 2011, Food Policy for Developing Countries: The Role of Government in Global, National and Local Food Systems. New York: Cornell University Press. p. 91

 

Poston, D. L. & Micklin, M. 2006, Handbook of population. New York: Springer Science + Business Media, LLC. p. 54

 

Porter, M. E. 1980, Competitive Strategy: Techniques for Analysing Industries and Competitor, New York: Free Press

 

Telegraph.co.uk 2011. HSBC sees China and America leading global mega-boom. accessed on 20 Nov 2011 [online] available: http://www.telegraph.co.uk/finance/economics/8239707/HSBC-sees-China-and-America-leading-global-mega-boom.html

 

Usda.gov 2010. Accelerated Productivity Growth Offsets Decline in Resource Expansion in Global Agriculture. (By Keith O. Fuglie), accessed on 20 Nov 2011 [online] available: http://www.ers.usda.gov/AmberWaves/September10/Features/GlobalAgriculture.htm

 


[1] The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population.

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