Entrepreneurship and the global world
Entrepreneurship is a global phenomenon, and standards are set internationally. Two domains of influence are: (1) Globalization – a process by which businesses start to develop international influence and operate on an international scale, and, (2) the digitalised economy – online selling and trading – meaning that products and services are traded and shared across national borders with ease. Now, local products and services not only have to compete nationally, but also globally.
Expect disruptions…
It is vital to understand and anticipate global competitive influence on national entrepreneurship. Although this represents a broad area of study with complex dynamics, it would be wise to understand the link between global ventures and the disruptions they can cause in national economies. First-world country ventures are the forerunners in trend setting, which spills over into developing economies. This impacts local new venture opportunities to capitalize on a market niche. Therefore, international new ventures and more established companies set the standards (norms) by which local newly formed ventures are judged. This increases the criteria for legitimacy – a judgement by stakeholders regarding the features of a new business, used to group the venture within a specific market category. Therefore, making it more difficult for new ventures to establish themselves within a market category.
Follow the trends…
It is therefore imperative to know about international trends. Also the type of ventures that are formed that exploit similar opportunities. More importantly, how they deliver value to their customers and how value is extracted from these customers. This can place one in a more favourable position when thinking about the value proposition and the market, the product-market fit.
Entrepreneurship on a country level
New ventures, like any other business, are regulated by policies which are constructed as a result of legislation. These policies provide a set of standards, regulations, which regulate the entity by entrusting the entrepreneur with certain responsibilities. These regulations differ from country to country as policies from common law differ. Therefore, trading globally, awareness of such differences should be known to conform and comply to the regulations of that country in which value will be extracted, whether it is through product sales, or through service delivery. International trade agreements simplify these regulations into agreed-upon standards between certain countries, making it easier to trade across borders.
However, it still remains the responsibility of the founder or manager of a business to be aware of such agreements, the countries affected by such agreements, and the nature of these agreements. Compliance with these regulations will require a good understanding of what they entail and the nature of the responsibilities affecting the new ventures that are thinking of expanding their offering across borders.
Understand the regulations for your business entity…
Furthermore, on a country level, regulations determine the type of entities that are available for registration and incorporation. The different types are usually selected based on size, turnover and employment. Each type of entity (legal business unit) is subject to different regulations, so their responsibilities might be different. Differences might include distinctive financial reporting requirements, VAT requirements, tax-related responsibilities and many others, all dependent on the country of incorporation and business entity selected.
