The movie *Other People's Money left me with a new love for Wall Street "raiders" and their corporate takeovers. In the beginning, I was all for the New England Wire and Cable Company trying their best to preserve the family business. All I could see was the havoc that a corporate takeover would create in their town and the Jorgenson family. However, I eventually started watching with a different perspective and got to take away a pretty significant lesson from it. That is that our market is constantly evolving and sometimes our business becomes obsolete. As sad as it sounds, this is a necessary thing that must happen for entrepreneurs to create more value and society to advance. In economic terms, structural unemployment=technological advancements. This aspect of obsoleting business is entrepreneurial because it continually drives entrepreneurs to solve more and more problems. For instance, the New England Wire and Cable Company's falling stock prices were reflecting their resistance to change. The owner wanted to keep the same exact practices and principles that the company used before him and as a result, they were being replaced by newer, more efficient fiber optic technologies. Also, their complacency created opportunity for problem-solving entrepreneurs like investor, Lawrence Garfield. He recognized and quickly acted upon their lack of innovation and started looking for ways to maximize the shareholder's wealth. After many meetings and business knowledge he eventually won the Proxy vote which liquidated the company and made shareholders much better off. So, the company was salvaged and it's resources were allocated to contribute to new entrepreneurial efforts, and the shareholders left with a profitable investment. This kind of value can only be created by the entrepreneurial efforts within the market.
This was such an interesting aspect because it's hard to believe that losing your business could actually be better for the economy. I would assume that this would be very hard for a business owner to have to deal with. I mean it's got to be hard considering what the CEO of Bed Bath & Beyond just recently did due to his company's loss in market share. Seriously though, when your business is no longer in demand, it means that somewhere, another entrepreneur found a way to create more value. So even though you lost your business that you poured everything you had into it to make a living, the economy is still rolling and blessing a new business that took action to innovate. The market does not slow down to accommodate for people's feelings in capitalism. It is a continuous cycle of value that is created by problem solving entrepreneurs. In the movie, the owner of the New England Wire and Cable Company could not understand this aspect. I believe it is because he had so much of himself invested into his obsoleting company. He couldn't bring himself to see that his industry was experiencing structural unemployment. It made me wonder how my father would feel if his HVAC company was replaced by a self servicing air conditioner. I think he would have the same course of action as the New England Wire and Cable Company and try and hold on to what he had built. And I don't think I would have the guts to sit him down and inform him how his loss was actually a great thing for our economy. (I hope that was funny)
In the end, this aspect of entrepreneurship affects society in a positive way. It is great for our society anytime entrepreneurs can make our daily lives easier by replacing an outdated industry. As we discussed in class, if one were to write down all of the problems they faced in a day, they would come up with several business ideas that could pose solutions. However, most of these ideas would not be original; instead, they would just be some form of innovation. For instance, when the idea of Uber came up they were building upon the current problems that one would experience when riding a taxi. See, the taxi industry was already present, but it needed innovation. Therefore, the creators of Uber made that happen and became a matchmaker for drivers and riders. This made ridesharing possible which ultimately had a huge impact on our society today. We have seen a decrease in DUI's in a large number of areas, and it created opportunities for more entrepreneurial activities. Business obsolescence is a great thing for society.
In addition, society plays the most important role in supporting this aspect. Entrepreneurs depend on society's problems to provide their product or service, and fortunately, we have a very needy society. In fact, I had a professor that once said "consumers are bit****". Although, the demand of problem solving always seems to outweigh the supply of solutions, this a good thing. Society continues to create or give life to more and more problems every day. Sometimes, when my girlfriend is ranting to me about all of her inconveniences, I try and come up with business ideas. She actually gave me a pretty good idea the other night that I can't share at the moment. Like my girlfriend, society does a great job expressing their frustrations through a variety of platforms like social media which drives innovation and leaves some of us with a dying business.
The interaction between the two is a direct relationship. They both depend on the other in order to exist. Society must continue to create problems so that entrepreneurs can innovate. Then, due to the innovations, we experience obsolescence of an industry. Even after an entrepreneur is successful and makes an advancement in technology, problems will still arise. For instance, we had the problem of diminishing natural resources so entrepreneurs introduced technology like wind turbines. Then, ecologists found that wind turbines had a harmful effect on our wildlife. Now, entrepreneurs are creating all sorts methods to naturalize our process of renewable energy. Although business obsolescence may seem like a bad thing, it is a healthy sign in a growing economy. And, the relationship between this aspect and society will continue to work off of one another as long as we progress.
