Free enterprise is based on five principles: 1. Freedom to choose your own business 2. Own property 3. Profit motive 4. Competition 5. Consumer sovereignty
The information revolution created by the Internet has impacted greatly two aspects of the free-enterprise. It has considerably widened the competition base. For example, before Internet revolution the competition was limited within certain area of a country. Now the competition has become global. Anyone from any country can pretty much take part in business competition. Even the bidding process has become worldwide.
Another aspect of consumer sovereignty has improved through Internet. Due to this information revolution, consumers anywhere in the world has access to evaluate goods offered over the internet and can decide to buy them based on quality and price. This has increased consumer power of decision making greatly.
All these are positive effects on free- enterprise. However, there is also negative impact. As labor cost in developing countries is low as compared to developing countries, exploration occurs. The reason is people have become aware of this situation and take advantage of it.
Feb 26th, 2015
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