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ENTREPRENEURSHIP
CITY COLLEGE OF SAN JOSE DEL MONTE

THE THEORY OF ECONOMIC
DEVELOPMENT

MERCANTILISM
The theory of
mercantilism was
the first major
economic theory
known in the
world.

MERCANTILISM
 It was based on the
idea that a nation's
wealth will increase
only if the government
regulated all the
nation's commercial
interests.

MERCANTILISM
 The Theory of
Mercantilism holds that
the wealth of a nation
can be measured by its
ready supply of capital,
generally held in the
concrete form of gold or
silver.

MERCANTILISM
 Mercantilism states that
the global supply of
wealth is a fixed amount
and that therefore any
gain of wealth by one
nation must necessarily
represent a loss by
another.

LAISSEZ-FAIRE THEORY
 An "invisible hand" that
guides supply and
demand, reflecting the
concept that each person,
by looking out for herself,
creates the best outcome
for all.

LAISSEZ-FAIRE THEORY
 According to Smith, this
creates wealth not only for
the people in business but
also for the whole country
where the citizens work to
provide for themselves and
others and where they take
care of their own financial
needs.

SOCIALISM
 Karl Marx disagreed with Adam Smith and the
laissez-faire theorists. He interpreted human history
as a class struggle between workers and
employers.

SOCIALISM
 He declared that free
enterprise (laissez-
faire) would lead to
increasingly severe
losses and would
eventually bring about
revolution by the
workers.

SOCIALISM
 They called for an economy where the government
owned all the property and distributed everything
equally among all the people through socialism.

JOSEPH SCHUMPETER
 explained that economic
growth is started by
people (whom he called
entrepreneurs) who
produce goods not only for
personal profit but also for
the good of everyone
around them.

JOSEPH SCHUMPETER
 He called entrepreneurs the
backbone of the economy.
 Entrepreneurs, according to
him, are people who find joy in
creating or producing goods;
who find self-fulfillment in
getting things done; and who
have a strong need for
achievement.

GLOBALIZATION AND
ENTREPRENEURSHIP

GLOBALIZATION
It is characterized by free
circulation of capital worldwide
and regulation by market forces
or “free trade” where there is an
easy or “free flow” of goods
from one country to another
because the taxes coming into a
country has been lowered or
even removed.

FOLLOWING ARE THE REASON FOR THE FAST
DEVELOPMENT OF GLOBALIZATION:
1. Globalization has emerged because of the advances
in information, communication, and transportation (ICT)
technologies.

FOLLOWING ARE THE REASON FOR THE FAST
DEVELOPMENT OF GLOBALIZATION:
2. There are new techniques of production and new
forms of organization that has given flexibility to the
location of industrial activities and reduced the share of
wages in production.

Entrepreneurship helps provide the following:
 Products and necessities that sustains life;
 Freedom from servitude, ignorance, social
deprivation and misery and;
 Self-esteem for the entrepreneur: to be
the person with the sense of self-worth
and self-respect and being of service to
the community.

The indicators proving that a country has reached
national well-being and true development:
1. Owners live within the community where their enterprise
is located.
2. Enterprises serve the needs of the residents for products
and services and make a living from doing this
3. The community has adequate supply of raw materials
that the enterprise would need.
4. The community offers the enterprise a steady source of
labor and in turn, is provided gainful employment by the
business.

The indicators proving that a country has reached
national well-being and true development:
5. The community willingly patronizes the enterprises and its
products and services.
6. Local government executives are supportive of the
business enterprises.
7. Local Government executives are considerate and
friendly to business owners.
8. Local Government executives assure the business peace
and order at all times.
9. There is an abundance of water and power supply.

FACTORS THAT AFFECT ENTREPRENEURSHIP IN
THE PHILIPPINES:
1. Top global executives believe that the growing number of
consumers in emerging market will be the most important
factor of global business during the next five years.
2. With the AFTA and tariffs near zero, the Filipino
entrepreneur’s market has grown from 92 million Filipinos to
half billion Southeast Asian. A huge market opens many
opportunities.
3. Filipino enterprises will be exposed to intensive competition
from lower-cost imports and locally based foreign firms
Describe by the department of trade and industry’s bureau of small and
medium business development (BSMBD)

THE PHILIPPINES:
4. With the trade liberalization, there is no such thing as a
domestic market alone. Either an enterprises has to rise up
and compete or it dies.
5. Competitiveness depends on two major factors.
a. the business environment in the country (which is
beyond the entrepreneurs control) and
b. the controllable condition within the enterprises
6. Entrepreneurs must do something to improve the
conditions under their control.

THE PHILIPPINES:
7. Entrepreneurs must be more focused in building their
niche markets.
8. Entrepreneurs must be more adaptive than their
competitors are.
9. Entrepreneurs must be able to use appropriate
technology. All these leads to productivity, which helps the
Filipino enterprises to compete in the global market.

CITY COLLEGE OF SAN JOSE DEL MONTE
Thank you

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