Feasibility of Launching an SME in Nationally Poor Economic Conditions

Prevailing economic conditions have a significant influence on business outcomes. For instance, economic crisis affect the employment levels in a country, with the subsequent lower incomes decreasing the demand for various commodities in the country (European Commission 24-30). Such an environment challenges the survival of the firm and lowers the intent to start new enterprises. For instance, one study that drew data from 93 countries noted that the 2008 financial crisis led to significant declines in new-firm registrations, with the decline being more pronounced in developed countries (Klapper and Love 2-3). However, such crises also create a sense of urgency and reduce negative attitudes towards new ideas thus fostering innovation (“Barriers to Innovation” 33-34; Loewe & Dominiquini 26 – 28). Starting a SME is thus not necessarily a futile activity in poor national economic conditions.Go to part 2 here

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