Review of Related Literature BR

REVIEW OF RELATED LITERATURE
2.1 START UPS
Start Ups are of any business that is established to cater a certain

need in the market. This may endorse new and unique products or developed
version of a previously existing product. Start Up business may begin in
various kind of ownership from sole proprietorship to a company and will be
considered under the start up category if it was established within 3-5 years.
Any business or company acquired from another business owner under the
same time frame is not a start up (Baldridge R. & Curry B.,2022). Local
economies have benefited from startups since they have inspired many
people to start their own firms. "Transformational" startups are the most
economically important firms with plans for regional or worldwide expansion
and have a big impact on the economy. Growth engines are new enterprises.
Strategies to promote competition and aid transformational entrepreneurs
must be devised in order to avoid economic stagnation. Government funding
is crucial, but the emphasis must be local. Cities must promote
entrepreneurship through their initiatives. Political and legislative agendas
cannot ignore entrepreneurs as a side issue any longer since they are crucial
to regional and national economy. They were breaking down obstacles and
promoting encounters. empowering owners of businesses. (Impacts of
Startups on Local Economies., n.d.)
According to Akehira, et. Al (2022), Start-ups are acquiring continuous

interest in becoming one of the rising industries around the world. This
industry challenges traditional business models with its complex utilization of
sources. In addition, the Philippines also has a growing startup scene,
although it doesn't have a strong and established platform in some industry
yet. For this reason, foreign investors can possibly be attracted, given the fact
that they can take advantage of the lack of competition that exists within the
local startup scene.
Every year, the continuous growth of Small and Medium Enterprises
(SMEs) has been observed alongside the optimistic growth of the economy.
Philippines has always been a hotspot for international business ventures for
investors and businessmen who are aspiring to establish a start up business
due to the “always curious” local market. Labeled as, “the next start up hub in
Asia”, Philippines has attracted various business opportunities from foreign
investors. But given the recent national issues affecting the overall economic
performance of the country, local business owners have struggled to maintain
stability on the local market. Some aspects of major concerns are, Inflation,
the COVID-19 Pandemic, High taxes, Political conflicts, lack of well developed
infrastructures or commercial areas and low performing telecommunication
services (Cullimore R., 2022).
2.2 THE LOCAL ECONOMY CONDITION
As much as local economies benefit from effective start up businesses, start

up business shall also reap benefits from effective local economy conditions.
But such recent conditions has positive and negative impacts that highly
affected small enterprises in the Philippines. One of the evident positive
impact of business growth in local area is it provides more employment for job
seekers. Startups are typically small businesses that need to hire employees
to produce their goods or services. This can create a ripple effect, as these
new jobs open up opportunities for others in the local economy, such as
providers of goods and services for the startup, additional suppliers, and other
businesses that benefit from increased consumer spending.
In addition to creating jobs, local community startups can also spur

innovation and creativity. Many of these startups develop unique products and
services that can attract customers or investors from outside their local
market. This can bring additional capital into the local economy, which helps
to create more jobs and stimulate economic activity. Startups can also help to
diversify a local economy by bringing new ideas and technologies into the
business environment. This not only helps to make the local economy more
resilient in times of economic downturns, but it can also help to attract new
businesses or industries to the area (FasterCapital, 2023).
Despite being in a strategic position and having interested foreign

investors, the Philippines nevertheless lags behind its neighboring Southeast
Asian nations. Deals worth 31.8 million dollars were made in the Philippines in
2018, which is just a third of those made in Vietnam and Thailand and less
than a tenth of those in Indonesia. The skill sets of the Filipino population are
one of the causes of the delay. Arguments that good communication skills and
versatility for the Philippines and other developing nations to achieve
sustainable and equitable economic growth have grown in popularity (Ghani
2010, Pasadilla 2006). Furthermore, according to a research by the Asia-
Pacific Economic Cooperation, the manufacturing, import-export, and service
sectors were crucial to the Philippines' economic development between 2010
and 2014. This pattern reveals a lack of advancement in the nation's
technology and entrepreneurial sectors.
The undeveloped startup culture in the nation is another problem it has.

In a news article by Lopez (2019), Natasha Bautista claims that "some
founders may seek mentorship from entrepreneurs who may not have had
experience in the start-up scene, and so they get traditional advice, which isn't
always applicable to a start-up seeking scale early on." The majority of
entrepreneurs and investors in the Philippines presume that start-ups are the
same as any other entrepreneurial venture.
In 2022, the Philippine economy saw rough seas as external

challenges complicated its epidemic recovery. The domestic economy,
supported by consumer spending, is poised to close the year with spectacular
growth rates. The target of 6.5-7.5% for the GDP set by the Marcos Jr.
government is anticipated to be met in 2022. Nonetheless, due to base
effects, Jun Neri, Domini Velasquez, and Leonardo Lanzona all assessed the
performance of the domestic economy to be a "failure." In 2021, the economy
was still dealing with pandemic obstacles as regulations kept most customers
at home (Agcaoili, n.d.). Although the Asian Development Bank expects the
country's inflation to peak shortly, economic development and growing prices
have left the nation's poorest citizens behind. Due to the collapse of
commodity and energy prices worldwide caused by Russia's invasion of
Ukraine, rising countries like the Philippines are now more susceptible to price
fluctuations. Commodity prices are still being artificially raised by domestic
shortages, and it's still unclear how to handle shortages in agriculture
(Royandoyan, n.d.)
Paying Taxes are a common part of doing business legally. This is a

mandatory responsibility to the government in order to fund further
developments in the local economy. However, it has been considered a slight
burden for small businesses most specially for those who have limited
resources to be circulated in the business. The competition with larger and
popular business is already considerably tight, the rental expenses for
commercial area units are also significantly high and with the addition of
multiple government requirements that aspiring entrepreneurs needed to
comply including paying taxes that they should regularly oblige to avoid
paying fine and penalties, small businesses including start ups find it difficult
to keep up with such demands resulting to short lived businesses. Local
business owners are unable to go for longevity due to this legal responsibility.
(All Property, 2022)
Overall, the start up business industry’s ability to create jobs, spur

innovation and bring new ideas into the marketplace makes it an important
part of any local economy. It helps diversify a local economy (Dasmariñas,
Cavite), making it more resilient and attractive for businesses and industries
looking for new opportunities. It improves quality of life for residents of an area
through the availability of products and services, leading to further economic
growth.

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REVIEW OF RELATED LITERATURE

2.1 START UPS

Start Ups are of any business that is established to cater a certain

According to Akehira, et. Al (2022), Start-ups are acquiring continuous

2.2 THE LOCAL ECONOMY CONDITION

As much as local economies benefit from effective start up businesses, start

In addition to creating jobs, local community startups can also spur

Despite being in a strategic position and having interested foreign

The undeveloped startup culture in the nation is another problem it has.

In 2022, the Philippine economy saw rough seas as external

Paying Taxes are a common part of doing business legally. This is a

Overall, the start up business industry’s ability to create jobs, spur

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