Entrepreneurship In Hong Kong With Focus On Artificial Intelligence

Introduction to Entrepreneurship and Its Phenomenon

Introduction

Entrepreneurship is a fundamental concept relating to economic and social growth. Artificial Intelligence along Big Data are becoming essential in broader research field that are usually considered important for entrepreneurship research, which include innovation, economic, and economic policy. Algorithms as well as Intelligent machines are not only empowering generation of new businesses but also shape the real-world phenomenon of entrepreneurship.  Aimed at studying the subject of entrepreneurship in-depth, researchers have classified information by establishing typologies intending to achieve an enhanced level of learning and understanding. In entrepreneurship, the term typology refers to the classification of types irrespective of their basis. The paper seeks to provide an extensive analysis of entrepreneur and entrepreneurship.

Small Business Entrepreneurship: the type of venture is very small and is only run by the owner, with the number of staff being very low. The business is run by the family members or friends and is associated with low revenue (Vod? and Florea, 2019, pp.1192). Such a venture includes a grocery store, electricians, and plumbers among others.

Large Company Entrepreneurship: in this type of venture, the organization has an indefinite life cycle. Most of the firms grow by innovating and developing new products, taking into consideration changes in customer preferences, change in technology, increased competition, and change in legislation. An example of such an organization is Apple, Google, or Microsoft.

Scalable Startup Entrepreneurship: this type entails starting a business using innovative ideas with the aim being to offer innovative products as well as services. Such an entrepreneur acknowledged that ideas are capable of changing the world. The entrepreneur hires the best and brightest minds and attracts venture capitalists. An example is the Silicon Valley entrepreneurs.

Social Entrepreneurship: these are the kind of entrepreneurs that aim to create products and services with the primary aim being to solve social problems and needs. However, unlike the scalable startup entrepreneurs, the focus is making the world a better place and not creating wealth for its founders or taking the market share (Laffineur, Barbosa, Fayolle and Nziali, 2017, pp.902). An example of such a venture is non-profit, for-profit, or a hybrid organization such as Transparency International.

Similarities between Entrepreneur and Intrapreneur

An entrepreneur and an intrapreneur are similar in that they share the same qualities such as creativity, insight, conviction, and zeal. However, the difference between the two is that an entrepreneur is an individual that takes risk to own and run a business with the intention of making profit. The entrepreneur, through the use of IT, envisions new ideas, techniques, and products, and is responsible for coordinating all activities. However, an intrapreneur is a company’s employee that is paid depending on the business’s success. Besides, in nature, an entrepreneur is intuitive while the intrapreneur is restorative. Also, the intrapreneur uses the resources provided by the organization while an entrepreneur uses his/her resources. In addition, entrepreneurs raise their capital while an intrapreneur use capital provided by the organization.

Range of Venture Types

 Similarities and differences between the four ventures are addressed below:

Factor	Small Business Entrepreneurship	Large Company Entrepreneurship	Scalable Startup Entrepreneurship	Social Entrepreneurship
Goals and Objectives	This type of entrepreneurship does not have well-established goals and objectives. However, they operate aimed at achieving lesser growth and profitability.	Such companies focus on sustaining its market by developing and innovating new products, services, as well as marketing strategies.	These type of entrepreneurs focus on constantly providing innovative products and achieving huge profits for its stakeholders.	The key objectives and goals for these type of entrepreneurs is to offer the best services and products with the intention of making the world a better place.
Structure	Such a venture does not have a proper organizational structure. The company is often run through partnership or sole proprietorship.	The organizational structure for this venture is very complex. It can either be a private or public limited firm.	The structure of this type of entrepreneurship is such that it is run through limited partnership or it can be a corporation.	These are trustee based companies.
Risks	The risks to these type of venture is low but it faces increased competition from same-sized firms.	There are medium risks involved since such companies are assisted by their brand image to sell their products and services.	The risks involved in this type of venture is enormously high as a result of increased financial investment and the pressure of obtaining high profits for the investors.	There are very minimal or no risks involved in this type of venture because it receives from the public as well as the government.
Number of Employees	There is no limit to the number of employees.	There can be more than 1000 staff.	The number of staff is dependent on size and structure	Depends on the size of the firm.

Public Sector: the entrepreneurial ventures under this category include social entrepreneurship. These ventures are either directly or indirectly controlled by the government. Their main emphasis is development and social welfare rather than profitability. The government invests huge amounts in such firms (Rajh, et al., 2016, pp.17). Besides, several private companies also offer strategic assistance to such organizations. These types of ventures are established in different sectors, aimed at providing quality products as well as services.

Corporate Sector: entrepreneurial ventures under this category include the small business entrepreneurship, large business entrepreneurship, and scalable startup entrepreneurship. They are either privately (individually) or publicly owned. The companies are concerned with developing marketing strategies that are concerned with providing customers with quality services and products to enhance their profitability (Pejic Bach, Aleksic and Merkac-Skok, 2018, pp.1462). Organizations such as scalable ventures and large organizations mainly focus on their rivals for sustainable development by determining the best strategies to assist them to gain competitive advantage.

Entrepreneur growth and development refers to a company’s plans to attain its objectives and goals of growth, thus expanding its business in regards to quality, turnover, and quantity. As Kuratko (2016) puts it, entrepreneurial ventures differ in terms of vision, mission, and objectives, and the three factors affect their scope. By developing new products and services, such firms can survive for a longer period as they generate high profits. As such, these types of ventures should mainly aim to develop new products by obtaining capital as well as planning to develop their products based on changes in preferences and market demand (Biraglia and Kadile, 2017, pp. 173). Growth of the four types of entrepreneurial ventures primarily depends on the quality of the products and services that they offer their clients, including their ability to meet demand, their sustainable strategies, and pricing.

LO2 Impact of Small Businesses on the Economy 

Hong Kong is a leading start-up center, with its student respondents ranking third among other global innovative hubs. Hong Kong aims to become a leading innovation and technology hub which is based on its level of entrepreneurship. The country’s entrepreneurs are ambitious in driving change. The main source of business ideas in Hong Kong is innovation as the country aims to become a technological hub. A study conducted by Deloitte show that in the 2019 Global Innovation Index ranking, Hong Kong is 13^th. SMEs are important to the country’s economy because they create employment and raises the country’s revenues. Small businesses in Hong Kong constitutes over 98% of the country’s businesses, employing at least 45% of the private sector’s workforce.

Impact of Small Businesses on the Economy

Small organizations play a crucial role in sustaining economic growth by creating jobs. For instance, in Hong Kong, as of 2017, there were approximately 331,000 SMEs that accounted for nearly 98% of Hong Kong’s establishments.

By definition, micro enterprises engage very few individuals in their operations. As such, in 2017, micro enterprises only accounted for approximately 26% of the private sector’s employment. In Hong Kong, as of 2017, SMEs dominated the business sector, featuring more in retail (96%) and wholesale (93%). On average, each SME engaged 3 individuals.

Besides, small ventures, as well as startups, also facilitate the growth of innovation. Besides, they also enhance competition by generating a new metric of conducting business (Zhang, Duysters and Cloodt, 2014, pp.635). For instance, such ventures include the so-called digital disruptors that comprise of Airbnb, Uber, and Funding Circle.

The benefits of small businesses, as well as start-ups, is based on buying and selling of products and services. They are important to the local social economy because they develop new products and services that meet economic needs. Besides, businesses also contribute to local economies by contributing to growth and innovation. The business enhances economic growth by employing local people that are unlikely to obtain employment from large organizations. Start-ups attract talents that end up developing new products along with implementing the existing ideas (Liñán and Fayolle, 2015, pp.923). Also, larger firms depend on small businesses to complete certain tasks through outsourcing. Nonetheless, start-ups and small businesses contribute to local governments through taxes. A successful local business generates high revenues, meaning that they will pay high taxes that include local property taxes. The impact that small businesses and start-ups have on the local economic growth as well as manifests in sales tax collection. Based on the location of a local business, they charge sales tax, providing a backbone to some special taxation districts whose central attention is on unique projects that comprise of sidewalk projects as well as lighting (Rachwal, Kurek and Bogus, 2016, pp.61). In this case, the focus is to attract additional customers along with improving historic shopping districts.

There are many small and medium businesses in the United Kingdom as compared to larger companies. The small and medium businesses contribute highly to the United Kingdom’s economy. These businesses have occupied almost all sectors and industries in the UK. Despite this, large corporations mostly obtain their high revenues as a result of their brand image along with the provision of quality products and services. Also, most of the larger corporations in the United Kingdom have establishments in other countries which equally contributes to their high revenue (Dvouletý, Mühlböck, Warmuth and Kittel, 2018, pp.1172). Many activities are associated with larger organizations, hence, they employ a large pool of individuals in the UK. However, according to statics previously presented in (P3), it is clear that the number of larger organizations is less compared to the number of small businesses and medium businesses. For instance, the data suggests that as of 2018, the number of SMEs in the United Kingdom was more than 5.4 million compared to 8,000 larger businesses, accounting for approximately 60% of UK’s employment. The SMEs are mainly concerned with providing consumers with productive products to gain attraction and enhance business growth (Abrhám, Bilan, Krauchenia and Strielkowski, 2015, pp.779). The high employment levels offered by small and medium businesses in the United Kingdom help reduce unemployment.

Key Aspects of an Entrepreneurial Mindset

Small businesses have diverse advantages both at the local, regional, national, and international levels. At the local level, small businesses create job opportunities for the society, thus improving the community’s overall health, including that of its people. Besides, the small businesses also offer support to other businesses by supporting other local firms to purchase supplies as well as for financing, thus retaining the money in the local community. Nonetheless, they also contribute to the local community’s identity by getting involved in community events along with contributing to nonprofits (Belás, Bilan, Demjan and Sipko, 2015, pp.317). At the regional level, small businesses compete with similar types of ventures to provide customers with quality products as well as services that can meet their demands effectively. Besides, at the regional level, they also provide employment, thus reducing the rates of unemployment. At the national level, small businesses generate revenues, leading to increased taxes that can are used for national development such as infrastructural developments. Also, small businesses can export their products and services to other states. Nonetheless, small businesses have the potential of growing and becoming multinational businesses, setting up branches in other countries (Elena and Tatiana, 2015, pp.187). This helps create employment in the given states. Besides, it results in foreign currency earnings for the parent country.

P5 Characteristic Traits and Skills of Successful Entrepreneurs

The primary difference between a manager and an entrepreneur is the role they play in a company. An entrepreneur owns the organization while the manager is an employee of the firm. Entrepreneurs are risk-takers and take financial risks with a vision and a focus to obtain maximum profits. Some of the traits that distinguish an entrepreneur from managers include:

Critical thinkers: most times than not, successful entrepreneurs are critical thinkers. They can process available data and details to ensure that they do not jump into new ventures without doing analysis, which may hinder success (Durguner, 2017, pp.106). With several start-ups failing, an entrepreneur should determine their tolerance to risk.

Confidence: without tolerance, an entrepreneur cannot attain any reward. Entrepreneurs believe that they are capable of accomplishing their goals. Risk management, which is a trait of an entrepreneur, is an art and a science that entails thinking of the unknown regarding things that are likely to go wrong and measures to be taken to mitigate these risks.

Enhanced sense of imagination: an entrepreneur is capable of developing creative means of solving issues. This makes them more likely to come up with the most efficient solutions that benefit every person, while at the same time showcasing an entrepreneur’s ingenuity.

Environments that Foster or Hinder Entrepreneurship

Communicate successfully: entrepreneurs are good communicators. They understand their customers and have the know-how of how to engage them. Besides, they can communicate with suppliers as well as investors (Janda, Rausser and Strielkowski, 2013, pp.201). The confidence that entrepreneurs have on their products and services enables them to communicate effectively.

An individual’s entrepreneurial personality is important when starting a new venture, including being motivated to face risks as well as problems linked with the business. Entrepreneurial characteristics entail traits than an entrepreneur uses to generate new ideas along with implementing a theme to generate revenue. The generated ideas are supposed to meet certain customers’ demands, and the entrepreneur has to develop such ideas if the business is to remain viable. As put forward by Scumpeter (2011), an entrepreneur is an actor that is capable of carrying out innovations to change. A successful entrepreneur should be autonomous concerning the company. Thus, autonomy is an entrepreneur’s crucial motivational factor. The entrepreneur’s main source of motivation is not the profits but rather the realization of his or her idea. Personal motivation enhances creativity as well as the recognition of new information systems that are crucial in discovering and exploiting promising opportunities. Personal motivation results in enthusiasm, persistence, along with enhanced efforts. Besides, the family’s background provides a source of industrial entrepreneurship. A family’s social status as well as occupation influences mobility (Nikolaeva and Pletnev, 2016, pp.179). Nonetheless, education also motivates an entrepreneur as it equips him/her with basic skills, including the knowledge of dealing with daily problems.

Trait Theory is one of the theories of entrepreneurship. The theory holds that entrepreneurship develops because entrepreneurs possess specific characteristics that make is possible for them to generate new ideas as well as create new ventures. The theory identifies traits such as need for achievement, risk-taking propensity, and locus of control as discussed below.

Need for Achievement: This line of argument relating to entrepreneurial characteristics refers to a person’s desire for achieving challenging goals and mastering skills. The entrepreneurial mindset in this case is the motivation to succeed (Novikov, 2014, pp.492). The argument is based on McClelland (1985) and is regarded as a dominant need that affects the action of an individual. An enhanced need for achievement determines entry into entrepreneurship. The need for achievement is also linked to the organization’s performance.

Risk-Taking Propensity: risk-taking is a feature that is used to differentiate non-entrepreneurs as well as managers from entrepreneurs. The main aspect of the entrepreneurial mindset in this case is the tolerance of risk, uncertainty, and ambiquity. Stereotypic impressions linked to entrepreneurs presumes that entrepreneurs are risk-takers (Stephens and Onofrei, 2012, pp.279). However, they only take calculated risks. An entrepreneur with an enhanced level of risk-taking propensity is energetic and optimistic, search for stimuli and excitement, and is daring and adventurous.

Venture Types: Small Business, Large Company, Scalable Startups, Social Entrepreneurship

Locus of Control: Locus of control seeks to determine an individual’s internal and external understanding of the social environment as well as the knowledge that is acquired through various situations. The entrepreneurial mindset includes having an understanding of the needs of the customers and being market driven (Proskurina, Heinimö, Mikkilä and Vakkilainen, 2015, pp.732). Entrepreneurs that possess increased levels of internal locus of control are considered to have increased power, more innovative, and discretion.

Issues with the study of entrepreneurial characteristics: studying entrepreneurship by viewing an entrepreneur’s characteristics is controversial. This is because there is an increased concern with the search for crucial entrepreneurship features (Viesi, Pozzar, Federici, Crema and Mahbub, 2017, pp.372). The trait approach is considered unsuccessful because it has not been able to differentiate an entrepreneur from a manager or a non-entrepreneur or the primary elements of entrepreneurship.

Characteristics, traits, skills, as well as motivation, are crucial factors that enhance an entrepreneur’s efficiency. For instance, Steve Jobs, Silicon Valley businessman who became famous for his work in Apple Computer Inc., was a self-motivated entrepreneur. Steve Jobs was highly motivated and passionate about his new venture (Mueller, Zapkau and Schwens, 2014, pp.253). He possessed the self-belief and maintained discipline in all his work. Besides, he had excellent communication skills that set him apart from other entrepreneurs. Using this skill, he was able to let the world know of his new venture. Being the founder and CEO of Apple Computer Inc., Steve Jobs had the risk-taking traits that enabled him to set up the new firm. Through his innovative ideas, he was able to create one of the largest organizations that serve to meet the demands of the customers globally (Estrin and Pelletier, 2018, pp.67). Nonetheless, he also possessed the motivational skills of dealing with risks and planning the business, including management skills that made it possible for him to run the entity.

P7 How Background and Experience Hinder or Foster Entrepreneurship. 

Personal background, as well as experience, have an increased effect on business because it can either foster or limit entrepreneurship. Some of the factors associated with this include:

Level of Education: entrepreneurs possess specialized skills and knowledge that is valuable to people. However, due to inappropriate entrepreneurial education, an entrepreneur may not be in a position to turn their ideas into real businesses, thus hindering entrepreneurship (Ni?u-Antonie and Feder, 2015, pp.265). For instance, during the communist regime in Central and Eastern Europe, there was little exposure to entrepreneurial education which hindered entrepreneurship.

Entrepreneur vs Intrapreneur

National Culture: National wealth determines the link between entrepreneurship and national culture. The economic development of the national culture has a direct impact on entrepreneurial activities (Y?ld?r?m, Çak?r and A?kun, 2016, pp.279). For example, traditionalistic cultural factors affect the level of entrepreneurship in a country while modernistic cultural variables affect the quality of entrepreneurship.

Economic Circumstances: Economic factors such as capital, labor, raw materials, market, and infrastructure have a direct effect on entrepreneurship. The availability of capital, for instance, facilitates entrepreneurs to bring together resources and produce products (Vod? and Florea, 2019, pp.1192). France and Russia exemplify that deficiency in capital impedes entrepreneurship.

Character Traits: the success of a venture is dependent on an entrepreneur. An entrepreneur is a leader of a venture. The entrepreneur must have a set of traits if they are to be successful. Deficiency in these traits may hinder entrepreneurship (Abun, Foronda, Agoot, Belandres and Magallanez, 2018, pp.107). The traits include hard work, the ability to manage and minimize risks, and persistence among others.

Risks and Rewards: a financial reward that is associated with entrepreneurship is a motivational factor that enhances the level of entrepreneurship. However, several risks are linked to entrepreneurship. Such risks can hinder entrepreneurship.

A person’s background and entrepreneurial characteristics can enable them to set up successful businesses. The link between personal background, characteristics, and entrepreneurship can be explained using the case of Steve Jobs. Many traits made Steve Jobs succeed, thus becoming the most-known entrepreneur of our time (Johansen and Schanke, 2013, pp.363). First, Steve had an uncanny ability to develop and designing technology products. He did put all his focus on design, believing that the most critical component in creating future products that were loved by people was through design. Besides, Steve Jobs was also extremely fearless and passionate. Most of his actions were controversial, some even risking his career. He possessed the ability to push his staff to extraordinary limits and have a convincing tongue on why a customer or an anticipating customer needed to have an Apple product. Steve also had unbelievable imagination. He believed that the products developed through his venture would change the way of communication, work, and life (Moraes, Iizuka and Pedro, 2018, pp.234). Through this analysis, it is evident that Steve Jobs’ success was mainly founded on his characteristics as an entrepreneur, experience, and personal background, indicating that these factors link with each other.

Family background and experience directly affects entrepreneurs positively and negatively. For instance, being brought up in an entrepreneurial family affects a person’s intentions to become an entrepreneur. Besides, when raised in such a family, a person can learn factors that entail managing a business, thus considering opening their venture in the future. Self-employed parents act as mentors and guide their children to start their businesses (Baark and Sharif, 2006, pp.133). However, if a person is raised in poor family hinders entrepreneurship. This is because there are no role models to guide the individual in starting their own business. Also, experience impacts on entrepreneurial activities. A person’s attachment to a family business or any other type of business in the past instills values that are strongly formed, and which motivate such individuals thus steering them towards entrepreneurship. However, the lack of prior experience in business limits a person’s entrepreneurial skills and desire. This is because they lack the know-how on what is involved in a business (Kerr, Kerr and Xu, 2018, pp.353). The exposure of an individual to family business results in entrepreneurial intentions through feasibility and desirability.  

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