EXAM REVISION 2 Flashcards
(8 cards)
Define the term entrepreneurship? (1 mark)
An entrepreneur is a person who is willing to seize opportunities to start and operate a business, and is prepared to take risks in the hope of making a profit.
Outline the personal motivation of the founder of a contemporary business that you are familiar with and explain how the business helps the owner to achieve their personal goal(s)? (3 marks)
Elon Musk is an entrepreneur who has founded many internationally successful companies, one of which is SpaceX. By founding the first commercial space travel business, Musk fulfilled his ambitious goal to expand the possibility of human space travel. As an already wealthy entrepreneur, Musk developed the SpaceX program to achieve social goals above all else. By advancing humanity’s ability to travel in space, Musk believes he has contributed to humanity’s ability to survive as a species should the Earth become uninhabitable.
Distinguish between ‘research and development’ and ‘technological development’, referring to examples of each? (3 marks)
technological development refers to applications of knowledge that have changed people’s lives and changed the way in which businesses operate, whereas research and development (R&D) is a set of activities undertaken to improve existing products, create new products, and improve production processes. R&D broadly encompasses the activities that are undertaken to achieve technological and other types of development. An example of technological development would be the use of artificial intelligence, whereas an example of R&D would be the process of developing new ways to incorporate artificial intelligence into products such as smartphone software.
Explain the relationship between business opportunities and business concept development? (2 marks)
Business opportunities refer to the sets of circumstances that present themselves to potential business owners as avenues to success. Opportunities may include ideas for new products, new customers and new ways of running businesses. Business concept development involves the potential business owner generating a detailed description of an idea for a new business initiative, including what the good or service is, the target market, and what the competitive advantage will be. The development of the business concept occurs when the prospective business owner takes an idea that has arisen from an assessment of possible opportunities and begins to turn it into an actual business.
Explain one way that businesses contribute to the economic wellbeing of a nation? (2 marks)
One way in which businesses contribute to the economic wellbeing of a nation is by creating jobs. Businesses employ more than 11 million Australians. This results in several economic and social benefits for the people they employ and the nation as a whole. Employment allows people to earn an income with which they can buy goods and services to satisfy their needs and wants. Employment also generates tax revenue for the government in the form of income taxes. This allows the government to provide society with social goods and services that would otherwise not exist, such as public schools, hospitals, roads, and so on.
Explain another way that businesses contribute to the economic wellbeing of a nation? (2 marks)
Another way in which businesses contribute to the economic wellbeing of a nation is through export earnings. Exports are goods and services that are produced locally and sold to overseas customers. A business may sell goods or services to individuals, businesses or governments in overseas countries to extend sales or develop new markets. Exporting products creates local jobs, boosting incomes and thus improving material living standards by increasing the purchasing power of Australians, as well as non-material living standards by providing them with the intrinsic benefits of being employed (such as the opportunity to learn new skills).
Explain one method by which a culture of business innovation and entrepreneurship may be fostered in a nation? (2 marks)
One way in which a nation can encourage a culture of innovation and entrepreneurship is through government investment in research and development (R&D). R&D grants and tax incentives make it more affordable for businesses to develop innovative products and processes. This acts as an important incentive as R&D can be expensive and generally only yields a return on the money invested when the business lands a breakthrough and puts it to commercial use.
Explain other methods by which a culture of business innovation and entrepreneurship may be fostered in a nation.
Another way is through council grants for new businesses. Council grants encourage businesses to open in local areas, thereby contributing to the overall social and economic wellbeing of the area. Such financial incentives are important, particularly for entrepreneurs wishing to establish a small business, who need every dollar of start-up capital available.
