This statement suggests that technological advancements are shifting economic rewards away from workers and towards those who own capital. There is evidence to support this argument, but it's not a universally applicable trend.

Evidence for the statement: Technological advancements, such as automation and artificial intelligence, are replacing human labour in many industries. This reduces the demand for certain types of labour, particularly routine and manual tasks. As labour demand falls, wages tend to stagnate or decline, leading to a smaller share of national income going to labour.

Evidence against the statement/qualifying factors: While technology can displace labour, it can also create new jobs in areas like technology development, maintenance, and data analysis. These new jobs often require higher skills and can command higher wages. Furthermore, technology can increase productivity, leading to higher profits for capital owners. This increased profitability can then be reinvested, creating further economic activity and potentially generating more demand for labour in the long run. The distribution of technological gains is uneven; some workers benefit while others are negatively impacted.

Conclusion: Technology is undoubtedly reshaping the labour market and influencing the distribution of income. While there is evidence suggesting a decline in the rewards to labour relative to capital in some sectors, the overall impact is complex and multifaceted. The long-term effects depend on factors such as the pace of technological change, the adaptability of the workforce, and government policies aimed at mitigating the negative consequences of automation (e.g., retraining programs, universal basic income).

(a) Governments play a significant role in fostering entrepreneurship through various policies. These policies aim to reduce barriers to entry, provide financial support, and create a supportive regulatory environment. Examples include:

• Tax incentives: Offering tax breaks to new businesses to encourage investment and job creation.
• Access to finance schemes: Providing loans, grants, and equity financing to entrepreneurs, particularly those from disadvantaged backgrounds.
• Simplified regulations: Reducing bureaucratic hurdles and streamlining the process of starting and running a business.
• Incubator and accelerator programs: Offering mentoring, training, and office space to help new businesses develop.
• Investment in research and development: Supporting innovation and technological advancements that can lead to new business opportunities.
• Promoting a culture of entrepreneurship: Through education and awareness campaigns.

The effectiveness of these policies varies depending on the specific context and the design of the policies themselves. However, government support can significantly enhance the likelihood of entrepreneurial success.

(b) Small businesses often face significant challenges in accessing finance. These challenges include:

• Higher perceived risk: Banks and other lenders often perceive small businesses as riskier than larger, more established companies.
• Lack of collateral: Small businesses may not have sufficient assets to offer as collateral for loans.
• Limited credit history: New businesses often lack a credit history, making it difficult to demonstrate their ability to repay loans.
• Information asymmetry: Lenders may lack information about the business's prospects, making it difficult to assess its creditworthiness.
• High transaction costs: The cost of applying for and securing a loan can be prohibitive for small businesses.
• Competition from larger businesses: Larger businesses often have easier access to finance due to their size and established track records.

Overcoming these challenges requires innovative financing solutions, such as venture capital, angel investors, crowdfunding, and government-backed loan schemes. Furthermore, demonstrating a strong business plan and a clear understanding of the market can improve a small business's chances of securing finance.

(a) Entrepreneurs are crucial for economic growth as they are the driving force behind innovation and new ventures. They identify unmet consumer needs and develop products or services to satisfy them. This leads to increased competition, improved efficiency, and higher levels of output. Entrepreneurs create jobs, stimulate investment, and contribute to overall productivity. They are often at the forefront of technological advancements, bringing new ideas to the market and driving economic progress. Furthermore, entrepreneurial activity can lead to the development of new industries and the expansion of existing ones, fostering a dynamic and resilient economy. Examples include the rise of tech companies, the development of sustainable energy solutions, and the creation of new consumer goods. However, entrepreneurial success is not guaranteed and requires a combination of skills, resources, and a favorable economic environment.

(b) Entrepreneurs face a multitude of risks, which can be broadly categorised as:

• Financial Risk: This includes the risk of not securing sufficient funding, running out of capital, and facing cash flow problems. Securing investment can be difficult, especially for new ventures with limited track records.
• Market Risk: The risk that the product or service will not be accepted by the market, or that demand will be lower than anticipated. This can be due to changing consumer preferences, increased competition, or economic downturns.
• Operational Risk: This encompasses the risks associated with managing the business, including difficulties in production, supply chain disruptions, and employee management.
• Legal and Regulatory Risk: Entrepreneurs must navigate complex legal and regulatory frameworks, which can be costly and time-consuming. Changes in regulations can also pose a significant risk.
• Personal Risk: Entrepreneurs often invest their own savings and time, and face significant personal stress and uncertainty. The risk of failure can have a profound impact on their personal lives.

Effective risk management strategies include thorough market research, developing a robust business plan, securing adequate funding, and diversifying revenue streams.