Entrepreneurship_Trade_Eco_Dev

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Entrepreneurship, Trade and Economic DevelopmentMirza A F M Tawhidur RahmanResearch OfficerBangladesh Tariff Commission

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Entrepreneurs: Who They Are!

•Believe it or Not! Every Goods in this Room is an outcome of Entrepreneurship…..

•Presence of Entrepreneurs are All Around Us!▫From Bill Gates to Mustafa Jabbar▫From Warren Buffet to Samson H.

Chowdhury▫From Dell to Rahimafrooz▫From TATA to Walton▫From BATA to Apex…… AND MANY MORE!

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Definition

•“An individual who, rather than working as an employee, runs business and assumes all the risk and reward of it.”

•New Thought: Social Entrepreneurship

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Definition (Contd.)

So, Entrepreneur, Commonly Interpreted as—

•A Business Leader/ Leader; And•Innovator of New Ideas and Business

Processes;

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Notions of Entrepreneur

•Risk Bearer;•Innovator; (But can be Imitator Also!)And •A Coordinator/Manager/Organizer;

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Factors Affecting Entrepreneurship Development1. Economic Factors 2. Social Factors 3. Psychological Factors 4. Government Actions

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Factors Affecting Entrepreneurship Development1. Economic Factors

a) Capitalb) Laborc) Raw Materialsd) Market

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Factors Affecting Entrepreneurship Development2. Social Factors :

a) Social norms and valuesb) Role modelsc) Social pressured) Respect and Statuse) Security

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Factors Affecting Entrepreneurship Development3. Psychological Factors

a) Self Achievement Need b) Innovativenessc) Risk Bearing Traitd) Leadership Trait

4. Government Actions Policy Intervention

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Govt. Initiatives

•Government acts as a facilitator through▫Formulating Different Policies▫Identifying Thrust Sectors▫Financial Patronization▫Tax Rebates▫Duty Drawback▫Infrastructure Development

Major Policy Shifts in Bangladesh’s History helped the Entrepreneurs and

Trade to thrive

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Entrepreneurship, Trade and Economic Development•Primary objective of a Government is

▫Economic Stability and Growth, BUT those depend on…..

ConsumptionEconomic Stability

and Growth

Employment

ExportInvestment

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Entrepreneurship, Trade and Economic Development•To Achieve Economic Stability and

Growth▫Development of Entrepreneurship▫Development of Trade Activity

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Why Development of Entrepreneurship?•What Entrepreneurs do—

▫Create Economic Resource▫Develop New Goods/Services▫Identify and Fill Market Gaps▫Explore New Market▫Create Employment▫Transfer of Funds▫Take the Opportunities for Investment

•Entrepreneurship is the PRECONDITION for Sustainable Economic Growth

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Why Development of Trade Activity?

• Benefits of Trade —▫Specialization of Production▫Creation of Productive, Higher Paying Employment▫ Increasing Total Output

▫ Static gains (increasing Social Welfare)▫Dynamic gains (increasing Economic Development)▫Expanding the variety of products for purchase by

consumers and business▫Encouraging investment and more rapid economic

growth

• Trade Keeps the Economy OPEN, DYNAMIC, and COMPETITIVE

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Synergy of Trade and Entrepreneurship• Success Rate of Entrepreneurs signal the

stability and development of the Economy• Increased Trade at certain level also works as a

factor for economic development• Exporters and Importers of a country are mainly

Entrepreneurs• When Trade and Entrepreneurship works

together, Synergy Effect is Found• Example:

▫ 33% of US Export Constituted from SMEs▫ 97% of US Export Oriented Firms are SMEs

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Barriers Faced by Entrepreneurs in Bangladesh•Non Tariff Barriers•Access to Finance•Training and Development •Social Barriers•Technological Barriers•Trade Facilitation Related Barriers

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Probable Solutions

•Building Training Facilities•Creating One-stop Service Center •Promoting Some Thrust Sectors•Increasing Accessibility of Funds Through

Reduced Interest Rate.•Taking Investment Friendly Policies

Entrepreneurial Development Cycle

Stimulatory• Entrepreneurial education• Marketing of entrepreneurial opportunities• Identification of potential entrepreneurs

Entrepreneurial Development Cycle (Contd)

Support• Access to finance• Providing utilities, land etc.• Granting tax relief• Offering management consultancy• Help for marketing products

Entrepreneurial Development Cycle (Contd)

Sustaining•Helping modernization•Helping expansion through diversification•Facilitating quality testing•Help re-engineer products or services

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Success Story : :

•Today Square Group Consists of 13 sister concerns

•Major Business Sectors: I. Health and PharmaceuticalsII. Textiles and ClothingIII. Consumer ProductsIV. AgroV. MediaVI. Securities

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Success Story : :

•No. of Employees: More than 28,000 •Yearly Turnover: $616 million•Exports to More than 50 Countries•Use Imported Raw Materials

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Success Story :

So, How Did It Commence?•Founder Chairman: Mr. Samson H Chowdhury• In 1952, he started a small pharmacy in

Ataikula village which is about 160 km off capital Dhaka

• In 1958, partnership pharmaceutical company was formed

•Starting Capital: BDT 20,000•Starting No. of Employees: 12 •Became Profitable By its fourth year

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Entrepreneurship in USA

Between 1993 and 2011, America's small firms accounted for—

•64% of the net new jobs creation•98% of exporters•produce 33% of all export value•create more than 46% of nonfarm private

GDP•create 43% of all high-tech employment. •over $90 billion in Federal contracts in FY

2011.

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Benefits of Trade for USA• Supported almost 9.8 million jobs in 2012.• 20% jobs in the manufacturing sector are

from export related sector.• Every billion dollars of U.S. agricultural

exports in 2011 required 6,800 American jobs throughout the economy

• US jobs supported by goods exports pay 13-18 percent more than the US national average

• Exports at 13.9 percent of U.S. GDP in 2012 .

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You Have Two Options…..

A. Working, working and working for someone else OR

B. Think Different and Become Entrepreneur

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THANK YOU

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