Entrepreneurial System Capacity, Population Pressure, and Socioeconomic Stability

This paper presents a formal model integrating entrepreneurial job creation capacity, labor force dynamics, and population pressure into a unified balance—feedback framework. It argues that economic stability depends not only on the number of entrepreneurs but on their complexity-weighted job creation capacity, as well as the relationship between total population and the system's carrying capacity. The model introduces the Entrepreneurial Capacity Ratio (ECR) and Population Pressure Factor (PPF) to explain unemployment, wage suppression, and systemic imbalance. Critically, K (carrying capacity) is operationalized as the maximum sustainable employment the economy can generate given current capital stock, infrastructure, and institutional quality. The model further incorporates a dynamic feedback extension using differential equations, showing that overpopulation can negate gains in entrepreneurship, leading to persistent socioeconomic instability. A Philippine case illustration is provided to ground the framework empirically.