Entrepreneurship is an innovative process defined by its ability to identify a business opportunity by addressing a specific need. Entrepreneurship in the contemporary world has adopted a sophisticated approach. Entrepreneurs are no longer developing tangible and space-consuming products. Instead, by integrating technology, the products that are currently emerging are aimed at enhancing convenience in a busy world. All the entrepreneurs that made presentations never had to gather tons and tons of materials that would be later assembled into finished products. Instead, they integrated technology to develop products that could be accessed by all people everywhere. The Dropbox, for example, is a useful cabinet that one can easily use to store files and access them at any place and at any time.
International new ventures (INVs), in other words, born globals, are a type of entrepreneurship that kicks off with a global sphere in place. Otherwise, the global aspect is realized soon after establishment. The unique characteristic of these international new ventures is that they develop niche products that are distributed to spatially dispersed customers. The production of these products is associated with low transportation, communication, and adaptation costs. According to Hennart (117-118), this process by which the INVs gain access to the international market is merely accidental and not complex as indicated by the Uppsala business model. Hennart proposes a new theory of born globals that embraces the novel technologies that make internationalization easier than was previously the case (118). After listening to the presentations, it is apparent that entrepreneurs were very strategic in how they executed their ideas. Unlike the usual conception that a business should start big, the INVs presented during the presentation started small and with limited resources. Networking and interpersonal dynamics, however, were imperative elements that enabled the propensity towards the growth of these ventures. Networking and interpersonal dynamics are still vital in the successful running of modern day’s born globals.
Entrepreneurship, therefore, has transitioned as entrepreneurs embrace a global approach from the onset. Currently, entrepreneurship revolves around global value chains. These global value chains include all the activities encompassed in the production of products until they reach the consumer. Global value chains are managed by a firm, or the firm can outsource services from another firm (s). Nowadays global value chains have emerged in large numbers due to the use of technologies in simplifying the interconnectedness of economies and networking of both buyers and buyers. An improved dynamic information system has enhanced tradability of goods and services across boundaries due to reduced costs of coordinating complex activities (OECD 9). The global value chains are beneficial to both the consumers and the companies. There is the interchange of skills and knowledge; companies are able to outsource production from specialized suppliers without incurring additional expenses. In addition, companies can easily access strategic knowledge assets by establishing investments far and wide. Hence, this fosters a trade-off between production and transaction costs as firms easily outsource inputs from countries/regions with lower costs.
Meeting the costs and financial needs of the global ventures is enabled by venture capitals (VCs) that currently operate through private equity for management buy-outs and buy-ins (Wright, Pruthi, and Lockett 135). These venture capitals provide all the required equity funds ranging from equipment, knowledge, technology, space, to manpower for privately-owned enterprises. Venture capitals are not limited to particular boundaries; instead, they transverse across borders. These VCs engage in entrepreneurial activity in uncertain environments. The VCs prevail in areas where potentially successful startups are at risk of failure due to asymmetric information problems that make it arduous for borrowers and lenders to meet. The VCs aim at ensuring whatever venture they invest in is successful by adopting an active value-adding and monitoring role throughout the running of the enterprise. However, institutional, cultural, and legal elements are inevitable determinants of the structure and running of venture capitals in the different countries.
Global entrepreneurship seems an easy venture that can be easily taken up; however, if the entrepreneur is not vigilant about licensing his or her venture and securing his or her intellectual property rights, all might be lost. The case of Avaro is one such example that potential global ventures should use as reference. It is not all about internationalization; rather, it is about possession of technological standards. Avaro’s management was not able to position its company in the international world because the Korean Ministry of Information and Communication had an upper hand in the running of the mobile payment system in Korea. Avaro only managed to form partnerships with various companies, and in the process passed on the idea to other companies. Over time, this technology invented by Avaro was not sustainable because technology is currently evolving. Hence, partner firms devised improved ways of upgrading the technology acquired from Avaro. In the process, Avaro lost its identity that it had once tried to preserve (Zhang and Dodgson 342-345). It is, therefore, important for a firm to devise an appropriate entry strategy into the global market to avoid unwarranted failures like those of Avaro. Prior to choosing an entry strategy, it is important that a firm carries out an evaluation of the new environment and the firm’s capacity to thrive in the new environment. While each mode of entry has its share of pros and cons, a firm should be succinct on its intent of choosing a particular entry mode. Laufs and Schwens (1118-1120) explain different theories that can help guide the different firms in making the difficult, but critical decision on the choice of entry mode into the foreign market.
The use of innovative systems has led to improved entrepreneurial activities that ensure each entrepreneurial idea is not wasted. Hence, the creation of incubators to accelerate the formation and growth of entrepreneurial clusters ensures that even the riskiest ventures are supported and diversified. The incubators are meant to link all entrepreneurs around the world in a virtual space where they can share ideas. In comparison to the global entrepreneurship summit that brings entrepreneurs from all corners of the world together, incubation saves time and money because it seeks to serve a similar purpose. However, the uniqueness of this technology is the fact that it does not limit involvement. It acknowledges a mere individual with some idea because what matters in the current world are the upcoming ideas. Hence, already established entrepreneurs act as advisors and guides in the successful actualization of the business idea (Carayannis and Zedtwitz 95).
As this discussion comes to a close, it is evident that even though innovation, efficient management systems, and sophisticated technologies are imperative to the success of any entrepreneurial activity, a well established financial and talent reservoir is imperative. A developed economy, therefore, is supportive of multinational enterprises due to the availability of well-developed institutional infrastructures; hence, global ventures are not able to thrive in economies that are ill-equipped. Due to the integrated use of technology that makes entrepreneurship a cost-effective venture, economies should equally provide cost-effective supply chains and a sophisticated market research environment to facilitate the internationalization activity (Khanna and Palepu par. 6-8).
References
Carayannis, Elias G., and Maximillian von Zedtwitz. “Architecting GloCal (global-local), Real-Virtual Incubator Networks (G-RVINs) as Catalysts and Accelerators of Entrepreneurship in Transitioning and Developing Economies: Lessons Learned and Best Practices from Current Development and Business Incubation Practices.” Technovation 25.2 (2005): 95-110. Print.
Hennart, Jean-Francois. “The Accidental Internationalists: A Theory of Born Globals.” Entrepreneurship Theory and Practice 38.1 (2014): 117-135. Print.
Khanna, Tarun, and Krishna G. Palepu. “Emerging Giants: Building World-Class Companies in Developing Countries.” Harvard Business Review 84.10 (2006): n.pag. Web.
Laufs, Katharina, and Christian Schwens. “Foreign Market Entry Mode Choice of Small and Medium-sized Enterprises: A Systematic Review and Future Research Agenda.” International Business Review 23 (2014): 1109-1126. Print.
OECD. Interconnected Economies: Benefiting from Global Value Chains. 2013. Web.
Wright, Mike, Sarika Pruthi, and Andy Lockett. “International Venture Capital Research: From Cross-Country.” International Journal of Management Review 7.4 (2005): 135-165. Print.
Zhang, Marina Y., and Mark Dodgson. “A Roasted Duck can Still Fly away: A Case Study of Technology, Nationality, Culture and the Rapid and Early Internationalization of the Firm.” Journal of World Business 42.3 (2007): 336-349. Print.