TABLE OF CONTENT

Abstract .......................................................................................................................2

Introduction .................................................................................................................2

Learning outcome 1 ......................................................................................................2

P1: Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship ...................................................................................................... 2

P2: Explore the similarities and differences between entrepreneurial ventures.......................... 8

Learning outcome 2 ....................................................................................................12

P3: Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy ............................................................................................................. 12

P4: The importance of small businesses and business start-ups to the growth of the social
economy .................................................................................................................................... 19

Conclusion .................................................................................................................20

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 Abstract

______________________________________________________________________________

In general, this assignment provides a comprehensive knowledge regarding to the entrepreneurship

and small business management. In addition, it clarifies the typology of the entrepreneurship and
the explanation of the SME and its contribution to the socio-economy development.

Introduction

______________________________________________________________________________

Since the 19th century, the term ‘entrepreneurship’ has developed wildly and become more and
more irreplaceable and significant. The purpose of this assignment is to provide the understanding
of the industrial development, regional growth and the employment generation, which depend
upon the entrepreneurial development. And therefore, the contribution of entrepreneurial SMEs to
economic development is clarified eventually.

Learning outcome 1

______________________________________________________________________________

P1: Examine different types of entrepreneurial ventures and explain how they
relate to the typology of entrepreneurship

Definition

Several scholars have studied the term ‘entrepreneurship’ for over seventeenth century1, and
therefore, various definitions of entrepreneurship have been determined afterwards. In general,

1 Pahuja A., Sanjeev R., “Introduction to Entrepreneurship” (2015).

2
 simply the entrepreneurship is understood as the concept of creating and developing a business
process to gain revenue as well as take several existed risks in the current world. In other words,
it is the willingness to start a new business. Thus, entrepreneurship plays an important role in the
economic development as well2.

Entrepreneurial activity is determined as a dynamic process which in which the new business is
starting up, an existing firm is working or a closing-down one is restricting3. In other words, the
entrepreneurial activity is an enterprising action of human to generate values via creating or
expanding the economy of scale, and by clarifying and exploiting new products, services or even
new markets4.

The term ‘enterprise’ particularly has wider meaning than other business term. It is a company
with multiple levels, locations, divisions or departments which all collaborate to meet the direction
of the business5. As observed by Rouse, the term ‘enterprise’ is quite close to some types of
organisations such as NGO, NPO or even some SMEs. However, this term is used more often for
larger firms than small ones.

The differences between serial entrepreneurs, intrapreneurs, and owner-managers

Serial entrepreneur is a person who comes up with a new business idea. However, this person
does not build these ideas up, but sell it to another person to take in charge6. As mentioned in the
European Venture Capital Journal, a serial entrepreneur is a person who constantly thrive on the
excitement of creating a business from scratch, taking the idea to market and make it happen7.

Intraperneur is defined as a person who blows the new atmosphere of innovation to the company,
and therefore, they keep entrepreneurial spirit with capabilities of a large cooperation 8. An

2 Friel, D., “What is entrepreneurship?” (2014), available at http://entrepreneurhandbook.co.uk:http://entrepreneurhandbook.co.uk

/entrepreneurship/
3 Fischer, M. M., Nijkamp, P., “Handbook of regional growth and development theories”, Business Administration and Econometrics (2009).

4 Seymour, R.G., “Defining entrepreneurial activity”, (2010), available at www.oecd.org: https://www.oecd.org/std/businessstats

/39651330.pdf
5 Kokemuller, N., “What are the meanings of enterprise, corporation & incorporated?”, (2010),

available at http://smallbusiness.chron.com/meanings-enterprise-corporation-incorporated-76688.html
6 Hyytien, A., Ilmakunnas, P., “What distinguishes a serial entrepreneur?”, Research Laboratory of the Business (2005), p.2

7 European Venture Capital Journal, (2005)

8 Hendricks, B., “What is Intrapreneurship? – Definition & Characteristics”, (n.d.), available at http://study.com

3
 intraperneur has the best qualities of a business visionary, they are the one who can take chance to
open the door of freedom, innovation, and enthusiasm to expand the business9.

According to Moran, an owner-manager is a person who both owns and manages their business.
They like the lifestyle which comes with running their business. Therefore, no plan to open a
second location, enter new markets, or double its business size in the next 12 months. They also
see most purchases as an expense, rather than an investment10. There are some examples of an
owner-manager such as the person in small stores, or persons who sell their products in the market.

In order to clarify the difference between serial entrepreneurs, intrapreneurs, and owner-managers,
the following table will illustrate the comparison among three term based on various criteria.

Criteria Serial entrepreneurs Intrapreneurs Owner-managers

Meaning The person who sets up and An employee who works A owner who manages
involves his own business in a large cooperation his business
with a new idea or concept. with his innovate ideas
Approach Intuitive Restorative Calculative
Resources Use outsource resources via Use resources provided Use his own resources
hiring employees by the firm
Capital Raised by himself Financial support by the Raised by himself
company
Enterprise New established business Existing one Existing one
Dependence Independent Dependent Independent
Objective Become the leader in this Renew the current Gain profit
field organisational system
and culture

9 Pinchot, G., “Who is the Intrapreneur?”, Intrapereuring: Why you don’t have to leave the corporation to become an entrepreneur (1984),
New York: New York: Harper & Row, pp.28-48
10 Moran, B., “Who is a small business owner?”, (2016), available at http://socialmediaexplorer.com:http://socialmediaexplorer.com

/contentsections/cases-and-causes/difference-entrepreneur-small-business-owner/

4
 The typology of entrepreneurship

Lifestyle firms refer to the business combined from interest and expertise to allow entrepreneurs
make a living. They have passion on their expertise, and hence, they choose a business model
which is more sustainable for long-term development. In many cases of lifestyle firms, no
shareholders leads to having more control in the operations of the business. In general, the term
‘lifestyle firm’ refers to small enterprise or home based enterprises. It can be true, in fact, some
big cooperation have strategy not to grow or sell anything to investors, but as the foundations for
the owners’ purpose11.

Another type of an entrepreneur is growth firm. Literately, with the aims of growing bigger and
bigger, growth firms are driven by the competitive nature of business. Having long-term vision
and continually seeking for the development, they get themselves to create profound value12. Thus,
these firms require more capital than the lifestyle firms.

M1: The understanding of entrepreneurship in both the public and corporate

Social entrepreneurship are businesses which take charge in societal, ethical and environmental
crises via sustainable initiatives. Social entrepreneurs are not the charity. They create their business
with innovative solutions to solve societal problems13.

In general, the corporate entrepreneurs and the public entrepreneurs are identified different but
similar across the dimensions of primary motivation, time orientation, skills, approaches, and so
on.

Public Entrepreneurship is the process of introducing the innovation, the generation and the
implementation of the new ideas, in the public sector14. According to Dr Pitelis, the enterprises
which works in the public sector have its own distinctive capabilities and comparative advantage

11 Hode, R., “Characteristics of Lifestyle Companies”, (2016), available at https://www.linkedin.com:https://www.linkedin.com/pulse

/characteristics-lifestylecompanies-rod-hore
12 Fisher, G., Entrepreneur Magazine (2011), available at https://www.entrepreneurmag.co.za/advice/growing-a-business/ performance-and-

growth/which-type-of-entrepreneur-are-you/
13 EIBI, “Social Entrerpreneurship: From theory to practice”, (2012), available at https://institute.eib.org: https://institute.eib.org /2014/06/

social-entrepreneurshipfrom-theory-to-practice/
14 Robert, N., “Public Entrepreneurship: A Typology”, (1989), available at http://www.dtic.mil:http://www.dtic.mil/dtic/tr/fulltext/u2/a

215634.pdf

5
 as well. In addition, a public sector business is enlisted as government property and also available
in the stock market.

Several researches have been studied about the entrepreneurship in the public sector. Therefore,
four main types based on the formal positions have been classified: political entrepreneurs,
executive entrepreneurs, bureaucratic entrepreneurs and policy entrepreneurs15.

Therefore, some utilities such as gas, water, electricity, so on, and broadcasting,
telecommunications, and the means of transportation are obvious examples of the public
entrepreneurs16

Corporate entrepreneurship refers to a set of activities to enhance current firm’s ability to

innovate, take the risk and seize the opportunities which are allocated in the market. A corporate
entrepreneurship targets on new market establishment, allocation with further business pursuing,
or even both17.

One of the great example of a corporate entrepreneur is Apple, an American multinational and
technological company. Apple was founded in 1976 by Steve Jobs, who always is the inspiration
of the world currently. According to MarketWatch, the price of an Apple’s stock is $190.98. In
general, they sell consumer electronics, computer software, and other services related to their
stuffs. Apple has its distinctive line of products involving iPhone, iPad, MacBook and so on. From
the beginning till the present, Apple is considered as a giant player in the technological field with
its strong innovation.

To further understanding the entrepreneurship in the public sector and corporate sector, the table
below will summarise the characteristics of both of them based on several scholars18.

15 Roberts, N. C., “Public entrepreneurship and innovation”, Policy Studies Review, (1992), 11(1), pp.62-63
16 The Editors of Encyclopaedia Britannica, “Public enterprises”, Britannica, (2017), available at https://www.britannica.com/topic/public-
enterprise
17 Brizek, G., “Explaining corporate entrepreneurship: A contemporary literature”, (2003), available at http://www.aabri.com: http://www.a

abri.com/manuscripts/131617.pdf
18 Morris, M. H., and Jones, F. F.m “Human resource management practices and corporate entrepreneurship: An empirical assessment from

the USA”, International Journal of Human Resource Management, (1993), 4(4), pp.873-896
Morris, M. H., et. al, “Corporate entrepreneurship and innovation: Entrepreneurial development with organisations”, (2008), Mason, OH:
Thomson/South-Western, pp192-193

6
 Categories Corporate entrepreneurs Public entrepreneurs

Organisational type Existing business Public sector organisation

Main activity Create value within the innovate Create value for people via
project bringing the unique
combinations of resources

Skills Strong technical, managerial skills; Strong political skills, power

weak political skills sources

Focus Build internal networks and find Use external forces to

external mentors and sponsors accomplish internal change

Risk and failure Moderate and principal risks. Hiding Calculated risk-taker
risky projects so can learn from
mistakes without political cost of
public failure

D1: The examination of the scope, the development, and the growth of the entrepreneurial
ventures

It is obvious that here is one firm can operate smoothly without the format of an entrepreneurial
ventures. And people are living in the world that the technology leads the first important factor.
Therefore, trying to innovate and evolve many more ventures in the corporation is necessary.

Generally, the entrepreneurial ventures are crucial for every levels of firms. There is an increasing
as the development or the decreasing as the recession of this term in this day and decades. Young
generation tends to focus more on conducting their own new businesses instead of taking a job in

Zerbinati, S., and Souraris, V., “Entrepreneurship in the public sector: A framework of analysis in European local government”,
Entrepreneurship & Regional Development, (2005), 17(1), p.47

7
 the existing business. Thus, the scope of entrepreneurship is expanding more and more19. Clearly,
the scope and the development of the entrepreneurial ventures are opened for SMEs because over
99% of the total firms conducted by SMEs. And so, with this high probability, SMEs still have
chance to enhance its growth in its competitive field.

P2: Explore the similarities and differences between entrepreneurial ventures

Micro, small and medium-sized organisations (MSMEs) refer to the organisations which have
limited employees and their capital falls below its certain amount of money which also known as
the annual turnover. Each country has different quota about the number of employee capital to
consider a firm as micro, small or medium-sized.

To give an illustration, to consider as a micro organisation, according to Europe Union standard,

this company must have fewer than 10 employees and its balance sheet is below EUR 2 million,
whereas in USA, its scope of worker is less than 5 employees and its assets must under $35
million20.

In current, as small or medium-sized enterprise is an organisation with 50 to 250 employees and

its annual turnover is from EUR 10 million to EUR 43 million. Typically, these organisations are
strong in the area of innovation16.

Roles of micro, small and medium-sized organisations

In the economy of scale, not only big corporation but also micro enterprises and SMEs play
important role to create the employment and generate the money. In the national economy, these
enterprises make substantial contribution to the employment creation and income generation
opportunities for low income groups21.

The development of MSMEs offers enormous benefits and opportunities to reduce the
unemployment rate and also address the demographic challenges posed by the growing

19 Burns, P., “Entrepreneurship and Small Business”, 3rd ED. Basingstoke: Palgrave MacMillan, (2011)
20 European Commission, “Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized
enterprises”, (2003).
21 Schukman, J., Huffington Post (2016), available at http://www.huffingtonpost.com: http://www.huffingtonpost.com/josh-schukman/what-

is-social-entrepreneurship_b_8100588.html

8
 populations. Thereby, it leads to more competitive and productive competition and hence, it
stimulates the growth of income both in general and per individual. In this decades, MSMEs are
associated with the innovation of technology. Since the rise in the income of the wider sector, this
process helps reducing inequalities and also create greater demand for better government. To sum
up, the positive development of MSMEs create better opportunities for both economy and politic
of a country.

To give an illustration, it is noting that the MSMEs have a significant contribution to the
socioeconomic success of Vietnam. It can be concluded that SMEs have played an important role
in the national economy. It is the main mean to narrow down the gaps among urban and rural areas.
In 2005, the total number of Vietnamese enterprises accounting for over 97% and 87% by regular
workforce respectively. As statistic, MSMEs have contributed 39% of total GDP in Vietnam and
32% of total investment outlays22.

Characteristics of micro, small and medium-sized organisations

Generally, MSMEs have several characteristics which are similar to the industry and market that
they are performing. First of all, these types of enterprise are depended on its limited employees.
With this nature, employees who works on MSMEs are usually multi-tasking. Those persons have
to deal with a wide range of tasks including producing, marketing, sales and so on. In some cases,
if they are lack of required skills to manage all tasks, it will lead to the reducing of productivity23.

The second characteristic of an MSME is its simplicity of operating. With the limited human
resource, a MSME prefers the most simple and effective operational model to run its business
smoothly. In addition, since the technological application and the changing economical world, it
helps business adapting faster than usual24.

22 Cuong, T. T., Sang, X. L., and Anh., K. N., “Vietnam’s Small and Medium Sized Enterprises : DevelopmentCharacteristics, Constraints and
Policy Recommendations”, Lim, H (ed.), SME in Asia and Globalization, (March, 2008), ERIA Research Project Report 2007-5, pp.323-364,
available at http://www.eria.org/Vietnam%E2%80%99s%20Small%20and%20Medium%20Sized% 20Enterprises%20Development_Character
istics%2C%20Constraints%20and%20Policy %20Recommendations.pdf
23 Ingram, D., Small Business (2018), available at http://smallbusiness.chron.com/list-explain-characteristics-small-scale-business-10472.html

24 Carpenter, M. E., BizFluent (2017), available at https://bizfluent.com/info-8714551-characteristics-smes.html

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 Thirdly, an MSME only can work on small and limited market area. Simply, because of its limited
resources and capabilities, a MSME cannot target to larger market. If they expand its scope of
business, they will not be an MSME anymore.

Last but not least, the MSMEs are firms with low profit. Thus, they are likely to be risk-taskers.
When a MSME is less affected by outside forces such as its shareholders, the more risk they are
able to handle. Therefore, it can be concluded that even the plan does not work effectively, the
damage would not be too larger to handle for these MSMEs.

Understanding social enterprise, social entrepreneurs, and the growth of the social economy

A social enterprise refers to an organisation created to further a social purpose in a financially

sustainable way25. The passion is about achieving explicit social or environmental aims. In other
words, these enterprise sell products and services related to social issues. Currently, many firms
would see themselves to have social purpose, but social enterprises are different because its social
purpose is considered as the first priority to what they do, not the profitable goals. Typically, a
social enterprise can either be a NPO or NGO26.

Similarly, social entrepreneurs are individuals who creates the purpose and profit driven the
organisation in which the business and its social goals run together27. It is required that a social
entrepreneur should have various entrepreneurial skills with creative thinking, their ideas should
have a positive impacts on society28. It is no doubt that they must have strong financial status to
run its business smoothly. Various studies have mentioned these people with their solutions for
social issues such as job creation, education development, health system and so on29. In conclusion,
whatever the society needs, social entrepreneurs will work for the solutions.

25 “Defining Social Enterprise”, NESst (2001), available at http://www.nesst.org:http://www.nesst.org/socia lenterprise/

26 Lane, M. J., “Social Enterprise: Empowering Mission-driven Entrepreneurs”, American Bar Association (2011).
27 J.Schukman, “What is Social Entrepreneurship?”, (2016), available at http://www.huffingtonpost.com:http://www.huffingtonpost.com

/joshschukman/what-is-social-entrepreneurship_b_8100588.html
28 Bornstein, D., “How to change the world”, New York: Oxford University Press, (2004), 1st edit

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 The growth of social economy

From the beginning, the social economy is considered as an activity. Historically, it is linked to
the association and the cooperative. And, these association have played an important role in 19th
socialist currents30.

The term ‘social economy’ appeared the first time in 1830 in the economics literature. For over
twentieth century, the US government has encouraged the social entrepreneurship as a crucial
factor to prevent the exclusion of society. As observed in a report in 2015, there is about 9 million
workers in over 15 states have been extended and employed by social enterprises and other NGOs
as well31.

In these decades, the term ‘social economy’ has been expanding in Europe as a contested concept.
However, the social economy involves corporations, associations, mutual and foundations 32. The
social economy is developing lately. In Europe, there is only around 2 million social enterprises,
and it equals 10% of the total businesses in the Europe. More than 11 million employees represent
6% of EU employees are working for social enterprises.

Generally, social enterprises is created as new firms, in a new market, with new ways of thinking.
Thus, it provides basic services for poor communications. With the innovation of technology,
social enterprises have more and more capabilities to improve the community with its highly
affordable products and services22.

In Vietnamese context, according to the 1986 Doi Moi policy, there is no NGO operating in
Vietnam, and all the social activities are supported by the state. In current, Vietnam is now
developing, and therefore, all the social issues need to be addressed. And, the term ‘social

30 José, L. M. C., Rafael, C. Á., “The Social Economy in the European Union”, CIRIEC, (2016)
22 J.Schukman, “What is Social Entrepreneurship?”, (2016), available at http://www.huffingtonpost.com:http://www.huffingtonpost.com
/joshschukman/what-is-social-entrepreneurship_b_8100588.html
25 Gupta, G. S., “Entrepreneur Middle Eas”, (2016), available at https://www.entrepreneur.com/article/281214

31 Rymsza, M., “The role of social enterprises in shaping social bonds”, International Journal of Social Economics, (2015), 42(9), pp.830-840

32 European Commission, “Social economy in the EU”, (2006), available at http://ec.europa.eu:http://ec.europa.eu/growth/sectors /social-

economy_en

11
enterprises’ are defined as the enterprises which are registered under the law of Vietnam. The
purpose is to solve all the social issues, and bring the benefit to the community. Thus, at least 51%
of the annual profit is reinvested to fulfil the objective.

From the beginning till now, the term ‘social economy’ in Vietnam is clarified as the business
associated with building the sustainable life, which handles the social issues instead of gaining
profit. In Vietnam, there are over 24 million people who are poor or have other physical problems
such as disabilities, prisoners, people with HIV/AIDS, which covers 28% of the target population
and so on. Besides, there are still some other problems which still exist, such as social violence,
unhealthy lifestyles, air pollution, and cultural preservation. The combination of the state and the
enterprise will improve the quality of life in the society. There is a survey which is conducted in
2012, 68% of the social enterprises aim to reduce the poverty and raise the standard of living for
the poor.

Learning outcome 2

______________________________________________________________________________

P3: Interpret and assess relevant data and statistics to illustrate how micro and
small businesses impact on the economy

The definition of creativity and innovation

Creativity is a sensation, or a characteristic of a person to formulate new ideas in their unique and
predictable way. According to Surbhi, the creativity represents for the ‘imagination’.

Innovation refers to develop existing ideas which creates more value for the business,
government, and even society as well. The innovation is also related to ‘implementation’. Thus, it

12
 is considered as a better and smarter way to do anything. Typically, it could be the introduction of
new technological application, new product segment, new method and so on33.

As the comparison, the creativity means a whole new thing is brought to the world, whereas the
innovation brings a new version of an existing thing27.

The main sources of generating business and entrepreneurial ideas

The ideas come from various sources. However, there are only seven sources stated by Peter
Drucker, the author of the book ‘Innovation and Entrepreneurship’, will be eventually illustrated
below34.

The unexpected means that the market is changing constantly and problems appears daily.
However, understanding why the world is changing is not really necessary, just that it is and how
it can be exploited. Essentially, entrepreneurs must look deep insight the market and look for the
business opportunity.

The incongruity is the gap between the assumption and the reality. Such opportunities are usually
qualitative rather than quantitative. Since it is typically visible, people must learn the way to ignore
them or innovate better solutions.

The process need is great opportunity leads to perfect process which already exists. Occasionally,
it makes a process possible through a missing link.

The change in industry and market structure refers the entrepreneurs analyse the industry they
are performing carefully. Typically, it could be the trend, customer behaviours, or the change of
policies which can provide opportunities. These opportunities are valuable because it is visible to
people who work outside the particular industry.

33 Surbhi, “Key differences between creativity and innovation”, Key differences, (2015), available at https://keydifferences.com/difference-
between-creativity-and-innovation.html
27 Surbhi, “Key differences between creativity and innovation”, Key differences, (2015), available at https://keydifferences.com/difference-

between-creativity-and-innovation.html
34 Drucker, P., “Innovation and Entrepreneurship”, Oxford: Elsevier, (1985)

13
 The demographic change refers to the population, age, gender and all other elements which need
to be taken into account. Therefore, it provides the knowledge of demographic with an
understanding of what they really want.

The perception change means the shareholders’ perception are not stable. Therefore, catching up
on time is really important, by so, entrepreneurs can find the ideas and inspiration as well.

The knowledge based innovation is the advanced technology development which impacts on the
opportunities created for entrepreneurs28. This source is essential to create new knowledge via
applying two separate two forms of knowledge.

How business protect intellectual property rights

Generally, the term ‘intellectual property’ (IP) is defined as any product of the human intellect
which protects from unauthorized use by others. The IP plays an important role to the growth of
business, and therefore, it is considered as the competitive advantages to gain the biggest market
share. A big organisation is always attractive to other players to copy its business model. That is
the reason why the business definitely must protect its IP35. Traditionally, the IP comprises of four
categories: patent, trademark, copyright, and trade secrets.

Patent is a select right given for an innovation, an item or a process which gives method to
accomplish something, or offers specialized answers to solve the current issues. The patent
proprietors are given with the assurance for their innovations. Typically, the assurance is allowed
for constrained period, generally 20 years36. Since the owner of an invention has been granted in
any particular country, then they have the legal authority to prevent others from making, using, or
selling the inventions.

Copy rights protect the original works of authorship, which typically includes the literary works,
music, dramatic works, sound recordings, artistic works, the computer software and so on. With

28 Drucker, P., “Innovation and Entrepreneurship”, Oxford: Elsevier, (1985)

35 Global Innovation Policy Center, Global Innovation Policy Center, (2009), available at http://www.theglobalipcenter.com/why-are-
intellectual-property-rights-important/
36 WIPO, “Intellectual Property Handbook: Policy, Law and Use”, WIPO (2008)

14
 the protection of copyright, the owners have their rights to modify, perform, create, display, and
copy the work.

Trademark has a significant role to represent the company’s brand. There are various types of
trademark which are design, logo, drawing, and the dimension of designing. Currently, the
trademark expands to the smell, taste, and even sound37. It can be seen as the source of products
(trademark) or the services (service marks) of one business from other players. Thus, to qualify
the patent protection, the mark must be distinctive. In addition, to own and apply the mark, the
business owner must has a clear presentation of this mark and its application to the which specific
goods and services as well38.

Trade secret is the recipe, the process, the formula that the business use to create its own
competitive advantages. Government or organisation cannot help business to protect its trade
secret, and therefore, the business must find their own way to deal with it. In general, the business
use agreements, restricted access to the confidential information and other security practices to
maintain the trade secret. It is crucial that the physical and digital protection of ideas are clarified
clearly. Thus, the business need to ensure that their employees are aware of what must stay out of
public conversation and away from other competitors32.

M2 & D2: The number and type of small firms and their contribution to the economy at
national, regional and local level

In the Vietnamese context

In Vietnamese context, over 97% enterprises have been accounted as small and medium
enterprises (SMEs), of which nearly 60% of them have very small scale of economy. Despite of
the increasing number of enterprises in Vietnam, these firms do not have a great contribution to
GDP of country and its growth rate as well39.

37 “Intellectual Property Office”, Unacceptable trademarks, (2014), available at https://www.gov.uk/guidance/unacceptable-trade-marks

38 UpCounsel, “Intellectual Property Protection”, (2004), available at https://www.upcounsel.com: https://www.upcounsel.com/intellectual-
propertyprotection
39 Linh, S., VnExpress, (2010), available at https://kinhdoanh.vnexpress.net/tin-tuc/vi-mo/doanh-nghiep-nho-thich-ung-tot-voi-khung-hoang-

2707602.html

15
According to the submission of Ministry of Planning & Investment on the development of
midterm review report on the implementation of the SME development plan 2011-2015 to the
Prime Minister, while the general turnover of SMEs apparently to be increased, the general profit
(before tax) is decreased enormously.

To give an illustration, in the period of time from 2010 to 2012, the turnover has increased from
$158.4 billion to $220 billion. However, at the same time, the profit (before tax) dropped from
$3.24 billion to $1.012 billion, which means over 70% of the profit has dropped considerably. As
consider to the entire enterprise sector, the contribution of SMEs dropped rapidly from 23% to 7%.

During 2001-2010, there were over 224,200 enterprises established while most of them are SMEs.
However, till 2013, the number of enterprises which dissolved and discounted, reached over
60,700 units, an increasing of 12% compared to 2012 and 13% compared to 2011.

In short, the decline of SMEs has many reasons, mainly because of the lack of breakthroughs in
the economic growth. During 2011 – 2013, the turnover is continuously growing below 6%
revenue target33.

In the regional and local context

There is an enormous growth and development of SMEs in Asian Pacific in this recent decades.
In particular, SMEs hold the key component leads to the economic development. In the Asia and
Pacific context, there are various ways to define the SME.

Typically, the differences between definitions come from its ownership profile, the type of legal
entity, or the general provenance. To give an illustration, in Cambodia, SME is the firm which
employs between 11 and 50 people, with its fixed assets around $50,000 to $250,000. In Indonesia,
there is fewer than 100 employees, whereas in Malaysia and Thailand, the scope of employees
depend on its business section. In Vietnam, according to the current law provisions, a SME has its
capital which not exceeding VND 10 billion, and its annual labour not exceeding 300 people as
well40.

40“SMEs in Asia and the Pacific”, available at https://www.unescap.org/sites/default/files/7%20-%201.%20SMEs%20I

N%20ASIA%20AND%20THE%20PACIFIC.pdf

16
 As mentioned before, SMEs have opportunities to dominate the corporate community in all Asian
Pacific countries, currently. In this region, SMEs comprise over 98% of enterprises and over 50%
the workforce employment. It can be concluded that the SME have a great contribution to the GDP
of this region in general. In fact, in some low income countries such as India in the Asian Pacific
region, the GDP increases to almost 17%, or between 40% and 50% in some higher income
countries as Singapore41. In addition, SMEs generate between 50% and 60% of the value added in
average.

In the international context

SMEs are by far the most common business model, account for 93% of all enterprises. In the
context of EU, SMEs are considered as the backbone to the economy of EU. Over 93 million
people are employed, which accounted for 67% in the total employment, and lead to 57% of value
added to the business sector. In which, over 90% of these SMEs are the micro ones which had less
than 10 people42. In the non-financial business sector, SMEs contribute the big role to the food
services, business services, and construction sector, which mostly drive to the exports. The SMEs
has finally recovered from the financial crisis (2008-2009) as the result of its upturn. In EU, the
SMEs employment rate grew by 5.2% during 2013 and 2016, even faster than the overall
employment rate twice.

According to the Official Journal of EU, in 2003, the total turnover of SMEs reached over EUR
60 million, and their balance sheet in total was EUR 55 million43.

The SMEs profitability was assessed to gain more insight into the success of SMEs. The analysis
showed only Canadian SMEs made $131 million in profit in 2012, which increased over 43.5%
from 1999. In addition, the total growth rate of SMEs increased over 25% in the period of time
from 1999 to 2012 respectively44.

41 Asad Ata, “The Role of SMEs in Asia’s Economic Growth”, available at http://www.smefinanceforum.org/post/the-role-of-smes-in-asias-
economic-growth
42 Muller P., et. al, “Annual Report on European SMEs 2016/2017”, SME Performance Review 2016/2017, CARSA, PwC Luxembourg, Lodon

Economics, Innova, The University of Manschester, DIW Econ, (2017).

43 “Commission Recommendation of 6 May 2003 concerning the definition of micro, small, and medium-sized enterprises”, Official Journal of

the European Union, (20 May 2003), 2003/361/EC

44, Daniel Seens, “SME Operating Performance”, Government of Canada, (April, 2015)

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 Naturally, the entrepreneur have a great and valuable contribution to the economy. They have a
great impact on the economic growth of the country. And their offerings are significant to the
society’s development. Citizens need the existence of entrepreneurs, specifically its products and
services, in the daily life. In these decades which more and more countries becoming developed
countries, the society are thriving on the consumerism. Thus, it is no doubt that the entrepreneur
is necessary to generate the value for the people of the particular country. An economy is depended
on the level of its entrepreneur’s performance. They play the key role in raising the national
incomes and the personal income per capita as well45.

SMEs: Adaptability, Sustainability, Innovation

Adaptability

SMEs has its own ability to adapt during the economic crisis. As mentioned in the Association of
SMEs in the end of 2008, 20% of SMEs were got into trouble to survive, while another 60%
decline in the production because of the impact of economic hardship. The last 20% are remained
to be stable due to they are less likely financed by loans and led by experienced executives.

In addition, the labour market does not seem to be interrupted by these crisis. In 2009, the surveyed
employment growth rate of SMEs was 9.9% of which, Quang Nam grew the most, 28.5%, followed
by Khanh Hoa, 18.8% and Hanoi, 13.7%33.

Sustainability

There has been raised a question to investigate the sustainability of SMEs, which concluded that
Vietnamese SMEs face with several difficulties. Till 2014, 68,000 SMEs are bankrupt, which
accounted for 12% of total Vietnamese SMEs. And in the first four months of 2015, over 20,000
enterprises have been bankrupt.

Various reasons have been mentioned, which mostly come from the business side, and its
institutions. In 2014, the majority of SMEs cope with several obstacles. In particular, 55% of total

45Sheshan G, “5 Ways Entrepreneur’s Contribution for Sustainable Economy”, Linkedin, (2015), available at https://www.linkedin.com
/pulse/5-ways-entrepreneurs-contribution-sustainable-economy-sheshan-g/

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 SMEs are because of the complicated loan procedures, while 50% have collateral constraints, 80%
of the interest rate claims, and the current conditions of loans are not appropriate as well46.

Innovation

In current, the economic development is following the trend of technological innovation and
integration. Increasingly, the economic development is linked to the environmental and social
factors, which are associated with the production and the consumption. Hence, Vietnamese SMEs
have to find its own way to generate the innovation, the research, the development, and the value
added.

The plasma co-ordinated “Made in Vietnam” by Dr. Do Hoang Tung and Nguyen The Anh could
be seen as the great example for the innovation of product. As the result, Vietnam has become the
country which have the most successful application of technology to its products, specifically the
technology of medical and aesthetic treatment47.

P4: The importance of small businesses and business start-ups to the growth of
the social economy

Small businesses have a significant impact on the economy and society of the current area they are
working on. As consider on the social impacts, SMEs have a great contribution to the social
economy.

Giving people opportunities is seen as one of the most outstanding contribution of small business
to the social economy. In other words, it creates the employment opportunities. It is not easy to
nail down the exact number, but it can be concluded that around 60% to 80% employees are
working on SMEs in US. Of course, with the small scope of work, SMEs do not have ability to
employee a handful of workers, but they have their power to add up the large portion of the job

46 Tâm, T., “Doanh nghiệp nhỏ và vừa cần tận dụng cơ hội để phát triển bền vững”, (2017), available at https://phokinhte.com:
https://phokinhte.com/doanh-nghiep-nho-va-vua-can-tandung-co-hoi-de-phat-trien-ben-vung.html
47 Thu, T., “Top 18 Startup Việt tiêu biểu do VnExpress bình chọn”, (2016), available at https://startup.vnexpress.net: https:

//startup.vnexpress.net/tin-tuc/hanh-trinh-khoinghiep/top-18-startup-viet-tieu-bieu-do-vnexpress-binh-chon-3513567.html

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 market48. Additionally, SMEs help animate the monetary development by giving business chances
to individuals who may not employable by bigger organisations. As statistic, small business
represents for over 99% of all employer firms. Since 1995, SMEs generated 64% of new jobs, and
also paid 44% of the total US private payroll49.

Secondly, SMEs have an important role to enhance the local economy. Specifically, small
businesses contribute to the local economy via bringing the growth and development of this
business to the community. The small businesses bring opportunities to the poor proviences which
does not have chance to develop their economy. Specifically, it is because no big corporation want
to invest to the small village.

In other words, they tend to create an appealing offer for talents who come up with something new
or innovate. Bigger firms likewise frequently advantage from SMEs inside a similar nearby group,
the same number of huge partnerships rely upon these small heroes for the fulfilment of different
business works through outsourcing50.

Last but not least, SMEs is about giving a chance for shifting the innovation. Of course, the
innovation is possible in the small business. In these small firms, employees usually work close to
consumers and learn about their needs. Typically, there is still exist few ranks of managers
separating line workers from the business owners. Employees can help their business through
sharing the idea that will profit buyers. Hence, enterprises must experience less organisation to put
workers’ new opinion energetically. This reality represents the reason why some creative labourers
like to work in this small organisation51.

Conclusion

In short, the entrepreneurship plays an enormous contribution to the economic development and
hence, the importance of entrepreneurship cannot be undermined.

48 Titanbdg, “10 BIG Benefits of Small Businesses”, (2010), available at http://www.titanbdg.com:http://www.titanbdg.com/blog/10-big-

benefits-of-small-businesses/
49 Ruesink, M., Rasmussen College, (2016), available at http://www.rasmussen.edu/degrees/business/blog/benefits-of-small-businesses/

50 Brown, J. M., Small Business, (2010), available at http://smallbusiness.chron.com/important-small-businesses-local-economies-5251.html

51 Biance, A., Small Business, (2015), available at http://smallbusiness.chron.com/reasons-small-businesses-important-54131.html

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