This action might not be possible to undo. Are you sure you want to continue?
An examination of the role and importance of individuals in enterprise, despite the changing face of business in the 21st century.
In his famous treatise, The Wealth of Nations, Adam Smith wrote that “the propensity to truck, barter, and exchange one thing for another” is an intrinsic characteristic of human nature. In recent times, this propensity to trade has become the major determinant of the kind of relationship existing between not only peoples, but also nations. New alliances such as the Organisation of Petroleum Exporting Countries (OPEC) and the European Union (EU) threaten to monopolise the direction of trade among individuals and nations. The recent drama in which the European aeronautic company, Airbus, overtook its American counterpart, Boeing, after years of manipulations by the EU is proof of the power such alliances now wield over us. Also battling for this position (or perhaps they complement each other) are the series of multinational corporations (MNCs) now dotting the horizon. In future years, these corporations might dictate to us how we sleep, eat and dress. The spectre of these organizations are not false and their impact on nations and people could be disastrous: Nigeria’s crushing debt of about $35 billion dollars to the Paris and London clubs and the way it has shaped our national and economic policies is a case in point. Gone are the days of the entrepreneur. Gone are the days when a man could single-handedly decide what to produce and what to trade and barter. We seem to have become mere pawns of these conglomerates and regional powers. At least, this seems to be the prevailing attitude of the times. But is it entirely true, that in the equations of 21 st century enterprises, in the age of globalization and free trade, that the human factor is so insignificant? Careful studies of past and recent trends indicate otherwise. Like old times, the world still belongs to individuals who venture out with the strength of their convictions. In ancient times, commerce was restricted mainly to local markets. What people neither grew nor gathered themselves, they obtained through trade. But as human wants and needs grew, commerce began to traverse the boundaries of local markets. Individuals who needed new markets in which to offer their products, and so escape suffocation by ‘mini-cartels’ pioneered this move which soon translated into long distance commerce.
As merchants began to form associations, long-distance trade became safer. The development of ocean-going vessels and the subsequent cost reduction in transportation in the 15th and 16th centuries led to a rapid expansion of international trade. This gave birth to new forms of commercial organizations. Legal partnerships were born out of informal associations. Shareholding broke down social barriers and made possible international trade for small traders. In the 18th century, the industrial revolution was born. The revolution has been rightly attributed to the development of steam power and other inventions. But more than technology or resources were involved: enterprise was required. While society gained in terms of creation of wealth and the production of jobs (between 1750 and 1914, world trade increased in value fivefold), it was a few enterprising individuals that reaped most of the gain. Unfortunately, while the American and European countries which were rich in human resource developed and became trade partners, regions such as Africa, rich only in natural resources, became heavily dependent on foreign markets. This same trend can be seen in the post-war eras of the 20th century. Due to efforts by organisations such as the World Trade Organization (WTO), exports more than doubled in volume and increased eight times in value between 1954 and 1974, but not all countries shared equally in this growth. Exports from the industrialized nations of North America and Western Europe expanded rapidly, while exports from developing countries fell behind. Again the determining factor in the balance of trade of trade was obvious: the presence or absence of human capital. International trade in many products is dominated by a few private companies – five car companies control 54% of world automobile production. These powerful companies are all concentrated in the northern hemisphere where literacy levels are very high. But more important, they are mostly founded by people who in the face of stiff opposition, had strange ideas of great proportions, mobilised capital to power their dreams, and forged ahead. Akio Morita and Masaru Ibuka would found Sony and become world leaders in electronics, in spite of companies such as Toshiba and Texas Instruments, from humble beginnings as manufacturers of cooking stoves; Micron, a new company with small capital outlay, would breakthrough in 64K DRAMS after the failure of giant companies and billions in research funding. All these point to one single fact as
illustrated by George Gilder in The Spirit of Enterprise; “…the crucial capital of industry is not money or machinery, but mind and spirit…” Now in the 21st century, though the face of enterprise has changed, the challenges and opportunities facing us are still the same. Globalization and free trade have led to outsourcing and offshoring and these are progressing on a massive scale. By the late 1990s, 60,000 Transnational Corporations with over 500,000 foreign affiliates accounted for about 25% of global output. The benefits of globalisation are numerous: the percentage of people in developing countries living below $1 per day has halved in twenty years; life expectancy has almost doubled in the developing world since WWII; child mortality has decreased in every developing region of the world; Income inequality for the world as a whole is diminishing; global literacy increased from 52% to 81% between 1950 and 1999. There are similar trends for electric power, cars, radios, and telephones per capita as well as access to clean water. Again the key words are knowledge and entrepreneurship – the human resources – and this explains why Africa, according to the United Nations Environment Programme (UNEP), is the only region in the world where poverty is expected to increase in the 21st century. Individuals would always play significant roles in new enterprises: individual vision would always prevail over the corporate leviathan. The question is “who will choose to be relevant?” Bill Gates, a young dropout who saw the future, built a company that has surpassed IBM, the goliath of the computer industry, and is now the richest man on earth. But it takes first of all a realization of the power of the human resource. The rise of the techno-capitalists has also brought about a rush of change and unprecedented wealth. They hope to turn workers into free agents and, via the Web, give everyone the same access to information and markets. The new Internet, they say, will end the cultural isolation of poor countries and poor people. Information and communication technology has placed at our disposal the tools needed to compete favourably with the largest corporations. No longer does an entrepreneur need to travel a thousand miles at great cost to trade; a phone-call will do. The internet will provide him whatever information he needs and allow him to send information to a partner half-way around the globe in an instant. Markets are migrating to cyberspace or some combination
of physical and virtual space. This free access to markets puts everyone on an equal footing with the largest organisations. The stock market is another tool that has made it easier to ‘play with the big boys.’ With a small amount, it is now possible to co-own the largest of corporations. The stock market is the only market ever where a man could make a billion dollars and lose it all in a minute. Consider the explosion of the Nigerian stock market in 2003 when people had their wealth multiplied several times over all for having the right stocks. Warren Buffet, the second richest man, employed this tool in getting where he is today. Those who hope to play important roles in the industries of the future must understand the skills that will be required and strive to acquire them. When Sabeer Bhatia, an Indian, first came up with the idea for Hotmail, he was rejected by a series of venture capitalists. As a ‘person of colour’, he naturally felt he was a victim of discrimination. But, he “… quickly realized that being foreign born was no barrier, it was only a barrier in my mind.” Now he has set up his own ‘curry network’, complete with regular deal-generating powwows, an annual conference, a magazine, and a web site. The barriers are all gone. Globalisation though a threat in many ways, is also the greatest opportunity for self-fulfilment that has come man’s way in the history of commerce. The seeming impossibility of building something great from the scratch in our times is simply an opportunity for us to test our limits. It serves as a sifting ground for those who cannot pursue their dreams and for those who find it difficult to forgo present consumption. The western world pioneered the age of enterprises and is steadily forging ahead; the Asians are fast catching up. We must not be left behind.
BEECROFT John O. Jul 2005 REFERENCES Microsoft® Encarta® Premium Suite (2004) Smith, A. (1776). The Wealth of Nations. Gilder, G. (1984). The Spirit of Enterprise. Wikipedia, 2005, (www.en.wikipedia.org/wiki/Free_trade) Global Policy Forum (2005). New York, NY 10017, USA, (www.globalpolicy.org)
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.