The Impact of Globalization on Entrepreneurs
Entrepreneurs have to think globally to survive locally. Even the smallest "Mom-and-Pop" shop might sell products made overseas, and that shop can also sell to customers in other countries through the Internet. All this interconnectedness creates a domino effect when one country's economy suffers. Exports might drop in that country, leaving entrepreneurs without products and raw materials they were used to buying. Entrepreneurship today means staying abreast of worldwide trends.
International chains may set up shop in a neighborhood and capture the market with low prices. Often they accomplish this by using cheap labor overseas and selling products at low profit margins. As an entrepreneur, you can fight back, however. Locally owned stores can offer products that large chains do not. For example, a restaurant can offer local foods that large restaurant chains cannot offer. A boutique clothing shop can sell garments designed and made locally. To harness their global purchasing power, large chains cannot afford to buy and sell local specialties.
Small businesses can compete globally because they can sell locally made products through the Internet. Shipping companies routinely accommodate small businesses by offering package shipping to countries around the world. In addition, small-business owners can purchase products for resale from overseas markets, thus gaining a pricing advantage that was once reserved for global conglomerates. Small businesses also benefit from favorable foreign exchange rates when they buy in countries where the dollar is worth more than the local currency.
The new metric for measuring business potential is no longer size, because small companies can access global markets as easily as large companies. What matters now is speed. Small businesses can adapt quickly to local and global trends because they have a smaller bureaucracy than large corporations. A single entrepreneur can spot a trend, order products or create services, and exploit that trend before larger companies complete their meetings on the topic.
Global markets have not brought global standards. Some countries do little to curtail piracy, and an entrepreneur can find herself fighting cheap imitations of products even when copyright or patent protection is in place. While increased competition can be expected with the global territory, brand theft is not mere competition and does not encourage innovation and risk taking. Entrepreneurs today must take every precaution to not only protect their innovations legally, but to also support international enforcement of intellectual property laws.