There are several questions posed out of anxiety that need proper answers. One of them is: why and how do innovation and entrepreneurship drive economic development? Entrepreneurs tend to create businesses and new jobs. This, in turn, increases productivity and strengthens market competition.
How Entrepreneurs Drive Economic Development?
1. Employment opportunities:
Its role to improve gross domestic product cannot be denied or neglected. New setups require employees in different roles to cater to the different needs of the business. Hence, they create jobs. Such economic opportunities do support and uplift communities by improving overall living standard and quality of life.
2. Investing in services/products people require:
It is essential to find out what exactly motivates someone to launch a new business. Traditional models state that entrepreneurs launch new businesses to cater to the market’s unmet demands and needs. There is an opportunity to offer a service/product not in existence currently or available. Such business starters are referred to as ‘opportunity’ entrepreneurs. They are different from those launching businesses due to lack of viable work opportunities. However, the opportunity entrepreneurs seeking business opportunities in unmet market conditions are considered to be the key players. They do play a main role to boost the region’s economic growth. They also provide access to services/goods required by the population to become productive. Even ‘necessity’ entrepreneurs not having other options do contribute towards a growing economy.
3. New technologies boost efficiency:
Developed countries have been benefitting from those entrepreneurs who have managed to convert ideas into new services and products. New technologies, along with their creative applications are what drive economic adjustment assistance and growth. Historically, rapid innovation is accompanied by strong growth in the economy. Developing innovative solutions and products requires a collaborative working environment and an educated population.
4. Regional economic and commerce integration:
Small businesses using modern technology can grow fast and become regional and global players. It also helps improve gross domestic product. As new businesses export services/products to nearby regions, they directly contribute towards the region’s productivity as well as increase earnings. Revenue improvement further strengthens the economy while encouraging overall population welfare. Trading economies flourish faster. International and regional trade boost investment in regional infrastructure and transportation. This, in turn, strengthens economies. Today’s world is more of an interconnected global economy. Foreign markets do play a vital role even for advanced, large economies such as the United States.
5. Addressing environmental concerns:
The fact is business opportunities are there, and innovation is likely to be crucial in the future as well. This is more so when addressing the environmental challenges that is being faced today in magnified proportions. Innovation also helps combat climate change, preserve environmental biodiversity, and reduce greenhouse gas emissions globally. If power is not present for extended time periods, then commerce will simply halt and no further progress will be made. Reliable access to the latest innovations, such as urban infrastructure, electricity, irrigation technology, etc. helps improve Economic Adjustment Assistance and productivity.
Entrepreneurship and innovation
The fact is innovation and entrepreneurship are both dependent on participation and access. Entrepreneurs have been trying to develop new ideas and bring them to life. They do require proper access to education along with a level playing field that allows them to compete. The government combined with public policy, should support entrepreneurs in huge numbers to launch businesses. For this, policies should be implemented that help nurture the desired environment to promote businesses and Economic Development. If there is an uneven spread of entrepreneurial activity geographically, demographically, and socio-economically, then the economy does not flourish as expected. With their incredible powers, entrepreneurs can regional areas to economically prosper.
