The business leader is also referred to as an entrepreneur. He/she is expected to seek ideas and convert them into reality to boost economic growth. The entrepreneur is said to be the trigger head who sparks economic activity with his/her entrepreneurial decisions. and Entrepreneurship in economic development plays a critical role. He/she also plays a vital role in developing the country’s industrial sector, including the service and farm sectors.
Role of Entrepreneurship
1. Develops employment opportunities in a large scale:
The unemployed can derive immediate large-scale employment, considered to be a major problem experienced mostly by underdeveloped nations. Entrepreneurs establish units and try to increase their number with time. This, in turn, creates employment opportunities. Such enterprises with time grow, thereby providing the resident population with both indirect and direct employment opportunities. Thus, they help to reduce unemployment problems suffered by the country while promoting growth.
2. Boosts capital formation:
Every business entity requires capital to start and promote its operations. Entrepreneurs mobilize the public’s idle savings to raise capital. They also borrow resources apart from investing money from their own savings, to establish their business. Such entrepreneurial activities do promote value addition along with wealth creation. These are crucial for any country’s economical and industrial development.
3. Reduces economic power concentration:
Business and industrial activities lead to economic power. Generally, industrial development results in monopolies. This problem can be addressed by promoting successful Business model. More entrepreneurs in numbers automatically reduces economic power concentration amongst the population.
4. Encourages balanced regional development:
Establishing industries, especially in backward, less developed areas does help eliminate regional disparities. Business and industry growth in such areas offer numerous public benefits. It is in the form of health, road transport, entertainment, education, etc. Also, such regions enjoy further progress, thereby boosting balanced regional development.
5. Increasing Per Capital Income (PCI) and Gross National Product (GNP):
Entrepreneurs seek and explore opportunities and exploit them. They also try to mobilize skill and capital and launch new services and products. This, in turn, helps promote economic growth, gross national product, and per capita income.
6. Wealth generation and distribution:
Equitable income and wealth redistribution get stimulated in the process. Thus, a larger section of society stands to benefit from a successful Business model. Moreover, entrepreneurial activities help generate activities, thereby providing the economy with a multiplier effect.
7. Encourages the country’s export trade:
Setting up businesses does help the nation to boost its export-trade activities. It is considered to be a vital ingredient for economic success. Entrepreneurs produce large scale service and goods to earn foreign exchange in huge amounts from export. This is to overcome the import dues. Therefore, export promotion combined with import substitution helps ensure economic development and interdependence.
8. Improving living standards:
As the country’s economy develops, its people start to enjoy better living standards. Entrepreneurs do play a vital role in increasing people’s living standards. This they achieve by using state-of-the-art technology to produce large-scale services and goods at affordable prices. Thus, people can enjoy deriving superior quality products without having to spend a fortune.
9. Induces Forward-Backward linkages:
A reputed business entity would try to function better in an ever-changing environment. Through constant innovation and adoption of strategies, it will try to adapt itself and optimize profits. Thus, it induces forward-backward linkages thereby stimulating the country’s economic development.
10. Facilitates overall development:
Entrepreneurs tend to act like catalytic agents to bring in change. This, in turn, causes a chain reaction. On establishing the business, the industrialization process is in motion. The unit is likely to create demand for different unit types desired. Other units will seek this unit’s output.
Hence, the above points clearly show that entrepreneurship does play a significant role in boosting the economic development of businesses and the country as a whole.
