Chapter 20 lc business business the economy com dev

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  • What kind of economy do you think we are… Mixed economy
  • Handout Page 413 from it’s the business on CEBs
  • Handout on Leader + from page 414 example of Cavan Monaghan leader
  • Chapter 20 lc business business the economy com dev

    1. 1. Chapter 20 Business, the Economy &Community Development D. Dempsey
    2. 2. Key Areas• What is an Economy SQ• Types of Economies SQ• Factors of Production (Review… done before)• Economic Variables NB. NB. NB. NB D. Dempsey
    3. 3. Key Areas• What is Community Development?• Examples of local Development projects• Benefits of Business Enterprise to local Community• Community Development Organisations: – Leader Plus – FAS – County Enterprise Boards – Area Partnership Companies D. Dempsey
    4. 4. D. Dempsey
    5. 5. D. Dempsey
    6. 6. What is an Economy?An economy is a system that uses the 4 factors of production to produce goods and services demanded by consumers. Free market/Capitalist/Free EnterprisePrivate ownership of the factors of production and the means of distributing goods and services. Consumer decides what is wanted not the state Controlled Economy Government tries to control economic activity by owning all the factors of production. D. Dempsey
    7. 7. What about us.What kind ofeconomy do wehave? D. Dempsey
    8. 8. Factors of Production1. Land – Refers to all the natural materials used in the production such as land itself, mineral wealth, water, timber, coal, natural gas, sun wind, fishstocks2. Labour – Physical human effort involved in production or providing a service3. Capital – Anything manmade that helps to produce goods and services. Machinery, buildings, factories, tools etc, aswell as finance itself4. Enterprise – Practiced by an Entrepreneur.. Enterprise coordinates the other 3 factors into a successful business venture D. Dempsey
    9. 9. New terms…SQs maybe…TopicalEconomic Growth…refers to any increases infinancial value of all G & S produced from acountry’s resources. Boom, Recession, Depression D. Dempsey
    10. 10. D. Dempsey
    11. 11. Example Q: Analyse how the economic variables/factors in the Irish economy impact on Business D. Dempsey
    12. 12. Economic variables impact on 3 key areas of business• Business Sales Your answer has these points• Business Costs• Business Confidence…in the future which influences their willingness to invest or expand D. Dempsey
    13. 13. Employment & Unemployment• Unemployed people have less disposable income…Think about the effects• Only purchase essentials• Sales & profits decrease therefore reduced job security…downward spiral• Tax rates increases• Social Problems• Reduced revenue to Gov• Workforce becomes de-skilled D. Dempsey
    14. 14. http://cso.ie/en/media/csoie/releasespublications/documents/latestheadlinefigures/l reg_oct2012.pdf D. Dempsey
    15. 15. D. Dempsey
    16. 16. D. Dempsey
    17. 17. D. Dempsey
    18. 18. Answering a Q• Sales• Costs• Business Confidence D. Dempsey
    19. 19. Inflation• % increase in prices of goods from year to year.• Measured by CPI… average family spendingImpact of high inflation on business• Higher cost of raw materials, less competitive• Imports become cheaper option• Reduced entrepreneurship• Wage increases• Less competitive internationally D. Dempsey
    20. 20. Effect of Low inflation rates• Businesses are prepared to borrow and expand• Increased tax revenue• Wage costs stay same• Improved competitive position in international trading D. Dempsey
    21. 21. http://cso.ie/en/media/csoie/releasespublications/documents/latestheadlinefigures/c pi_oct2012.pdf D. Dempsey
    22. 22. D. Dempsey
    23. 23. D. Dempsey
    24. 24. Answering a Q• Sales• Costs• Business Confidence D. Dempsey
    25. 25. Interest Rates• Price of money • If low then money is cheap • If high then money is more expensive and therefore people are more reluctant to borrow• Irish interest rates are set by ECBImpact of increase on Irish Business• Reduces profits• Halt expansion, miss opportunities• Discourage people from setting up business• Higher inflation, less disposable income, reduced demand D. Dempsey
    26. 26. Answering a Q• Sales• Costs• Business Confidence D. Dempsey
    27. 27. Exchange Rates• The price of one currency against another.NB… Short QThe general rule for exchange rates when anexchange rate falls:• Exports = cheaper• Imports = dearer• Home tourism benefits• It leads to import inflation as we have to import essential raw materials and finished goods. These are now more expensive therefore leading to higher prices in Ireland D. Dempsey
    28. 28. D. Dempsey
    29. 29. Answering a Q• Sales• Costs• Business Confidence D. Dempsey
    30. 30. Taxation Contribution to the state by its people and businesses.• What happens when there is an increase or decrease in… – Corporation tax – PAYE – PRSI – VAT How does this affect business? D. Dempsey
    31. 31. Answering a Q• Sales• Costs• Business Confidence D. Dempsey
    32. 32. Subsidies and Grants• A Subsidy is a payment from the government to a firm. Opposite of tax.• Allows the firm to provide unprofitable services by providing price top-ups• EG. CIE• A Grant is a non repayable amount of money from Gov’ and EU… DON’T WRITE FREE MONEY D. Dempsey
    33. 33. D. Dempsey
    34. 34. How does business activity impact on overall development of the Economy?Positive Impact Negative impact• Jobs • Large firms can have very• Tax revenue strong influence• Reinvest profits • Increased inflation• Economic growth • Difficult cycle to break• Multiplier effect• Controlling inflation • Pollution• Reduced Social welfare • Competition can cause job• Local communities losses• Standard of living/Quality of • Social cost of Business life D. Dempsey Handout
    35. 35. Key Areas• What is an Economy• Types of Economies• Factors of Production• Economic Variables D. Dempsey
    36. 36. Chapter 20Community Development D. Dempsey
    37. 37. Key Areas• What is Community Development?• Examples of local Development projects• Benefits of Business Enterprise to local Community• Community Development Organisations: – Leader Plus – FAS – County Enterprise Boards – Area Partnership Companies D. Dempsey
    38. 38. D. Dempsey
    39. 39. What is Community Development?Refers to the efforts by local communities tosolve their social and economic problems by developing entrepreneurship among local people. Community enterprise initiatives are anessential element in tackling local economic stagnation or decline. NB… Start of every answer D. Dempsey
    40. 40. 2011 Mark Scheme D. Dempsey
    41. 41. 2003 Mark Scheme D. Dempsey
    42. 42. Examples of Local Development Projects:• Building Holiday cottages to rent out• Opening a community sports facility• Setting up a skills training for local people• Setting up a childcare service• Forming a Local Tidy Towns Association• Establishing a Credit Union• Restoring an old Historic Building• Cleaning up a local river/restocking it with fish• Starting a local festival or summer school• Creating tourist hiking or walking trails D. Dempsey
    43. 43. Benefits of Business to local Community• Job Creation• Emigration is reduced• Improvement of commercial life of the area• Improved standard of living/quality of life• Greater demand for housing-construction and spin off employment• Encourages local entrepreneurs More on Page 363• Creates wealth Signs of a strong and• Helps communities plan vibrant local community.• Sense of identity and pride Same as benefits• Tax revenue D. Dempsey
    44. 44. 2003 Q: D. Dempsey
    45. 45. 2003 Mark Scheme D. Dempsey
    46. 46. OL Q What factors can influence a business’s decision to locate in a local community? D. Dempsey
    47. 47. County Enterprise Boards• 35 CEBs in Ireland• Introduced to provide support and advice to small businesses throughout Ireland.• Small Business with <10 employees• Each CEB has an evaluation committee responsible for making decisions on how much Fin’ Aid to give a project.• Provide a mentor for new Business• Grants…Capital, Feasibility, Employment• Training courses for business Owners/Mgrs D. Dempsey
    48. 48. Answering a Q on CEBsThe aim of CEBs is to help small and start upenterprises locally. ie – to encourage localiniative tin order to stimulate economic activityat local level. Done by offering financial support.• Advice• Training See Handout• Grants• Mentoring D. Dempsey
    49. 49. 2011 Mark Scheme D. Dempsey
    50. 50. D. Dempsey
    51. 51. Area Partnership Companies Are organisations that help local communities set up businesses in their area. Each APC develops an Action plan to help its community address problems of disadvantage that it faces: Galway City Partnership Tallaght Partnership Funded by EU and Irish Gov Ballymun Partnership Waterford Area Partnership Set up under the Governments “Partnership 2000” D. Dempsey
    52. 52. The APC provides funds for a range of servicesincluding: Training: Enterprise, Job and Mgmt skills Personal Development training Grants, Loans, Mentoring Premises for new projects called “enterprise incubation units” Access to further Education Access to affordable community childcare D. Dempsey
    53. 53. Leader Plus Liasons Entre Actions de Development de l’Economie Rurale (Links between activities for the development of the rural economy) An EU Funded scheme designed to help rural communities to implement business plans for development of their areas according to their own priorities • Rural Tourism35 Leader + schemes in Ireland • Training + Recruitment • Provides technical support to rural Dev projects and promotes innovationFunding is from EU and Irish Gov 70:30 • Small Firms/Crafts/Local Services • Agri/Forestry/Fishery Products • Green InitiativesGrants of up to 50% of the cost of the project is available D. Dempsey
    54. 54. D. Dempsey
    55. 55. Westmeath community development LtdD. Dempsey See Handout
    56. 56. FAS• Foras Aiseanna Saothair(Training & Development Authority)• Services cover Small, Medium, Large, Indigenous, Foreign, and those in the sector of industry and services• Enterprise Scheme – Encourage unemployed to set up own business• Training Programme – Equip unemployed with new skills, help find job• Community Enterprise Scheme – Help community based groups with plan to provide employment…Advise, Training and Financial aid D. Dempsey
    57. 57. Functions of FAS – Training & Retraining – Employment Schemes – Placement and guidance services – Assistance to community groups + worker co-ops towards the creation of jobs – Assistance to people seeking employment in other EU countries D. Dempsey
    58. 58. Agencies that assist Community Development• Enterprise Ireland • Bord Bia• Bord Failte • CERT• Bord Iascaigh Mhara • Crafts Council of Ireland• Bord Glas • Teagasc • Business Innovation Centres D. Dempsey

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