Describe the role of entrepreneurship in today’s multicultural, global economy.

2. Section Objectives • Describe the role of entrepreneurship in today’s multicultural, global economy. • Explain why the global market is important. • List current trends that provide both domestic and global opportunities for entrepreneurs.

3. The Main Idea The countries of the world are linked in a global economy made possible by free trade agreements and advances in communication technology. International markets present opportunities in all regions of the world.

4. Content Vocabulary global economy exporting importing trade barrier tariff gross domestic product (GDP)

5. The Global Economy global economy the interconnected economies of the nations of the world Entrepreneurship plays an important role in today’s multicultural global society. Technological advances and changes in trade barriers have created a global economy.

6. The Global Economy exporting the selling and shipping of goods to other countries importing the buying or bringing in goods from other countries to sell International markets provide opportunities for entrepreneurs to engage in importing and exporting goods and services.

7. Trade Barriers Have Fallen The World Trade Organization is a global coalition of governments that makes the rules that govern international trade.

8. Trade Barriers Have Fallen tariffs a type of trade barrier imposed by a government as a tax on imported or exported goods trade barriers restrictions on goods entering or leaving a country The World Trade Organization works to eliminate or lessen trade barriers and tariffs.

9. Global Opportunities Gross domestic product (GDP) the total value of all goods produced in a country during the year A nation’s economy is measured by its gross domestic product (GDP).

10. After You Read 1. Describe the role of small business and entrepreneurship in today’s multicultural, global economy. Small businesses and entrepreneurs are going global to take advantage of the opportunities to do business with other countries.

11. After You Read 2. Explain why the global market is important. The global market holds many opportunities for growing businesses because it is many times the size of the U.S. market.

12. After You Read 3. Discuss how the global market provides domestic and global opportunities for entrepreneurs. Opportunities lie in every part of the world where customers need or want products made in the United States and from which products not found in the United States can be imported. Huge opportunities are available in Asia, Latin America, and Europe and in developing nations.

13. Section Objectives • Identify the benefits and risks of international trade. • Explain how to find the best international markets. • Compare and contrast importing and exporting.

14. The Main Idea To conduct international business successfully, you must understand foreign customs and cultures. Whether you choose to import or export products, the international market presents many profitable business opportunities.

15. Content Vocabulary interpreter Standard Industrial Trade Classification (SITC) codes International Business Exchange (IBEX) trade missions “best prospect” list disposable income trade intermediary foreign joint venture export management company freight forwarder

16. Understanding International Business Understanding how other countries conduct business is important to your success as an entrepreneur.

17. Tips for Showing Respect Dress conservatively. Do not correct other people’s language. Be prepared to remove your shoes in some situations. Respect different tastes in food. Do your homework before the first meeting. Build a relationship before you do business. If necessary, bring an interpreter. 17

18. Tips for Showing Respect interpreter a person who translates one language into or from another It is important to show respect and understanding for the cultures of the people with whom you do business. An interpreter will help ensure that your communications to others are accurate.

19. Strategies for Entering International Markets Standard Industrial Trade Classification (SITC) codes a system that details the kinds of products that are traded in specific countries and how well certain products sell in different markets One good resource in finding an international market for your product or service is using Standard Industrial Trade Classification (SITC) codes.

20. Other Sources of Help There are many sources to help entrepreneurs locate the best market for their products or services. Entrepreneurs who want to sell online should contact the U.S. Chamber of Commerce regarding its International Business Exchange (IBEX). International Business Exchange (IBEX) the electronic commerce system that allows businesses to find trading partners and sell products and services anywhere in the world

21. Other Sources of Help “best prospect” list a list compiled by the government of products that other countries want to purchase trade mission an opportunity offered by the U.S. government and private agencies to small businesses to travel to other countries to meet with foreign agents, distributors, or potential business partners A small business with products on the government’s “best prospect” list will gain the chance to go on a trade mission.

22. Deciding on a Product to Export disposable income money people have to spend after paying for necessary expenses To be successful as an exporter of consumer products, it helps to market to countries to sell where people have enough disposable income.

23. Where to Find Import Opportunities Attend trade shows. Read trade publications and catalogs. Research the market. Talk to potential customers. 23

24. Where to Find Export Opportunities Establish an e-commerce web site. Establish a foreign joint venture. Use an export management company. Hire a freight forwarder. License foreign businesses to sell your products. Use a trade intermediary. 24

25. Deciding on a Product to Export trade intermediary an agency that serves as a distributor in a foreign country An entrepreneur can expand a business into a foreign market by using a trade intermediary.

26. Where to Find Export Opportunities foreign joint venture an alliance between an American small business and a company in another nation Some entrepreneurs find it helpful to establish a foreign joint venture in order to gain entry into a new global market.

27. Where to Find Export Opportunities freight forwarder a company that arranges shipments and prepares necessary exporting paperwork export management an organization that handles all of the tasks related to exporting for a manufacturer An entrepreneur wishing to export goods or services to another country may employ the services of an export management company and/or a freight forwarder.

28. Things to Consider Before Going Global When entrepreneurs think about going global they should make sure they have: • solutions • a new idea • a market for the product or service • the ability to handle risk and frustration • good contacts in other countries

29. After You Read 1. Describe the benefits and risks of international trade. The benefits of international trade include being able to purchase goods or services from and sell them to other countries and to manufacture in other countries. Countries with unstable governments provide a riskier form of opportunity; there are many barriers and little government support for business owners.

30. After You Read 2. Explain how to find the best international markets. The U.S. Census Bureau’s Guide to Foreign Trade Statistics helps in locating sources for various trade statistics. Standard Industrial Trade Classification (SITC) codes tell what kinds of products are traded in specific countries.

31. After You Read 3. Compare and contrast importing and exporting. Importing is buying products from other countries to resell in your own country. Exporting is selling and shipping goods to other countries.

32. End of Chapter 4 Global Opportunities