LESSON TWO Factors that Influence Entrepreneurship.
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Transcript of LESSON TWO Factors that Influence Entrepreneurship.
Outline
Factors
1. The Economy
2. Markets
3. Demographics
4. Technology
5. Government Initiatives
6. Environmental Concerns
7. Availability of Financing
8. Trends and Fads
ECONOMICS study of resources and how they are managed
1. The economy
Economy –a system that exists to manage production, distribution and consumption of goods.
Consumers have needs and wants and businesses supply the needs and wants
A prosperous economy allows for consumers to increase/change/improve needs and wants….stages of the economy
Prosperity
Prosperitytimes are goodlots of jobsstrong salariesaffordable homesstandard of lifestyle is goodlow unemployment rateinflation rate is average (i.e. 2% per years) defined…
Recession
Recession – •extended decline in business activity•Two negative consecutive quarters of falling real gross national product
• Quarter – three months• GDP – record
•Visible in industrial production, employment, consumer purchases, exporting/importing •Interest rates will fall to help stimulate economy
Inflation
persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of
currency
inflation is high in Fort McMurraycase of pop …doubled in price
Could lead to recession
SaskatchewanGDP Unemployment Inflation
2011 – 4.8% change
5.5 2.8 (July)
2010 – 4.2 % change
5.2 2 (1.9 Aug)
Depression
Period which employment rate is very very low
Alberta and SK unemployment rate – 4.4% August (SK was 5.0 in Feb)National unemployment rate 7.3 (Canada was 7.6 in February)
U.S. 8.1Las Vegas 12.2%
SMART Response QuestionTo set the properties right click and selectSMART Response Question Object->Properties...
1929 – 1939 – Great Depression 1939 – 1945 – Recovery (military demand stimulated
economy) 1945 – 1965 Prosperity (post-world war II) Baby
Boomers born during this time. (largest group) Since 1945 there have been several recessions in Canada, but there has also been times of prosperity. 1981 – 1982 – recession 1983 – 1989 – SLOW recovery 1990/1991 - consumer spending weakened - recession 1992 – 2005 – recovery to prosperity 2008 – 2009 global recession 2009 and on recovery…...........2011 .....running
close ..recession
Example mortgage rates
2012- 4.5% 2007 – 6% 1998 – 6.5% 1994 – 8% 1992 – 11% 1990 – 14-15%
1980 – 1981 – 18%
2008 – fixed 5-6Variable 3.52011- 4 - 5%
Example
Complete mortgage calculation– 5% for 5 years, amortized over 25 years– 7% for 5 years,– 11% for 5 years
Complete vehicle calculation 6 years– 6% for five years– Value of loan $32,000, what was paid out
A prosperous economy is good for A prosperous economy is good for business.business.
definition is the study of how society uses its scarce resources.
2. The Markets
Definition A market exists when buyers and sellers
come together – the buyers as the money and the seller has the good or service
Market – economy is based on supply and demand,
http://www.slideshare.net/Geckos/the-four-types-of-economic-systems-presentation
Demand and Supply
Demand – consumer demand for a product/serviceDemand – consumer demand for a product/service Very little demand – product or service will not sellVery little demand – product or service will not sell High demand – product or service will sell and prices will High demand – product or service will sell and prices will
increaseincrease Supply – of product or serviceSupply – of product or service For some products demand is high – and prices stay high For some products demand is high – and prices stay high
(i.e. name brand clothing for teenagers); For some (i.e. name brand clothing for teenagers); For some products if the prices decrease (i.e. ipods -- demand will products if the prices decrease (i.e. ipods -- demand will increase)increase)
Once demand is established….there are two
categories of markets:– 1. Consumer market – consumer buys from business– 2. Business to business – business buys from business
(i.e. Dairy Queen buys product from Scott National – napkins, etc.)
4. Technology Production Communication Diagnostic Storage Entertainment Home/Car
Software and hardware– Programs and equipment
e.g. IpadsCell phonesNetbooks
Old technologiesdesktop com
Work from homeFewer support
-adv, acc