Eco 3 Introduction of Enterprise and Entrepreneurship

Midterm Reviewer
Summary of Chapter 3
Copy for Ninjas
The Government and Entrepreneurship
Characteristics of an Entrepreneur
1. Risk takers
2. Self reliant
3. Optimistic
Role of Government in Economic Development
1. Setting up the economic infrastructures
2. Directly involved in the private sector that has no or
inadequate investment
Determinants of Investment
*Profit is the first consideration in investment
*Profit stimulates businessman to go into business
*Only the government can possibly engage in business without
profit
*Profit depends on population, income, peace and order, political
stability, government policies and other external Economies of
scale
External Economies of
Scale
1. Energy
2. Transportation
3. Communication
Facilities
*In using the external
economies of scale,
entrepreneur s is greatly
dependent on the
government

Internal Economies of
Scale
1. Management
2. Technology
3. Working
conditions
4. Financial
incentives

The Role of Government

*In democracy the function of the government is to serve the best
interests of people.
*Laissez Faire System (1700s Europe), the non-interference of the
government in economic activities led to the growth of capitalism.
The capitalists abused their powers and privileges
*The role of the government is to promote the welfare of all
sectors producers, consumers, employees, business men and
the rest of society and the economy
*A good government should always consider social justice as the
basic yardstick in public administration.

Support for Entrepreneurs

*In Ramos Government, the key factor of development is the
People Empowerment
*The best way to empower the people is to improve their
knowledge, skills and values and give then reasonable financial
and technical support to organize their enterprise.
Government Assistance Program
1. Peace and Order 6. Education and
2. Political Stability
Training
3. Price Stability
7. Public
4. Taxes
Administration
5. Infrastructures
8. Production
Technology
9. Marketing
Assistance
10. Financial Assistance
Summary
1. The government plays a key role in economic development. It
sets up economic and social infrastructures. It also
participates in business. However, once the economic has
developed, the government has to phase out its active role in
business. The role of the government is to provide the
necessary policies and infrastructures in order to speed up
the growth of the economy. At this stage, the private business
sector becomes the engine of economic growth
2. Profit is the primary determinant of investment. Profit
depends
on
income.
Population,
political
stability,
government policies, peace and order and socio economic
infrastructures
3. The role of the government is to serve the interests of all
sectors based on the principles of social justice. The poor and
the powerless should receive the first priority from
government assistance programs
4. Entrepreneurs contribute much on economic development.
Hence the need for government support for entrepreneurship.
Such assistance should be for the poor masses. However, the
best gift from the government to the poor is to help them
improve their knowledge, skills and values. Such
development is the real development.

5.

The national government has several programs for the

development of the growth of entrepreneurship. These are
the Magna Carta for Small Enterprises, Kalakalan 20, Micro
Enterprises Development Program, etc.