4/28/2019 Role of Entrepreneurship in Economic Development
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Role of Entrepreneurship in Economic
Development
Posted Date: 06 Nov 2009 | Updated: 06-Nov-2009 | Category: Education (/resources/Category4-
Education.aspx) | Author: Renjith.R.P (/member/superman007.aspx) | Member Level: Gold
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Are you looking for information about the role of a Entrepreneur in the economic
development of a country? If so, check this resource to know more about it,
Role of entrepreneurship in economic development.
Entrepreneur
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4/28/2019 Role of Entrepreneurship in Economic Development
An entrepreneur can be regarded as a person who has the initiative skill and motivation to set up a
business or enterprise of his own and who always look for high achievements. He is the catalyst for
social change and works for the common good. They looks for opportunities, identi es them and
seizes them mainly for economic gains. An action oriented entrepreneur is a highly calculative
individual who is always willing to to undertake risks in order to achieve their goals.
Need for Entrepreneurship Development
Economic development essentially means a process of upward change whereby the real per capita
income of a country increases over a period of time .Entrepreneurship has an important role to play in
the development of a country. It is one of the most important inputs in economic development. The
number and competence of entrepreneurs affect the economic growth of the country.
The economic history of the presently advanced countries like USA, Russia and japan supports the
fact that economic development is the outcome for which entrepreneurship is an inevitable cause.
The crucial and signi cant role played by the entrepreneurs in the economic development of
advanced countries has made the people of developing and under developed countries conscious of
the importance of entrepreneurship for economic development. It is now a widely accepted fact that
active and enthusiastic entrepreneurs can only explore the potentials of the countries availability of
resources such as labour, capital and technology.
The role of entrepreneurs is not identical in the various economies. Depending on the material
resources, industry climate and responsiveness of the political system, it varies from economy to
economy. The contribution of entrepreneurs may be more in favourable opportunity conditions than
in economies with relatively less favourable opportunity conditions.
Entrpreneurship and Economic Development
Entrepreneurship helps in the process of economic development in the following ways :
1) Employment Generation :
Growing unemployment particularly educated unemployment is the problem of the nation. The
available employment opportunities can cater only 5 to 10 % of the unemployed. Entrepreneurs
generate employment both directly and indirectly. Directly, self employment as an entrepreneur and
indirectly by starting many industrial units they offer jobs to millions. Thus entrepreneurship is the
best way to ght the evil of unemployment.
National Income
National Income consists of the goods and services produced in the country and imported. The goods
and services produced are for consumption within the country as well as to meet the demand of
exports. The domestic demand increases with increase in population and increase in standard of
living. The export demand also increases to meet the needs of growing imports due to various
reasons. An increasing number of entrepreneurs are required to meet this increasing demand for
goods and services. Thus entrepreneurship increases the national income.
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Balanced Regional Development
The growth of Industry and business leads to a lot of Public bene ts like transport facilities, health,
education, entertainment etc. When the industries are concentrated in selected cities, development
gets limited to these cities. A rapid development . When the new entrepreneurs grow at a faster rate,
in view of increasing competition in and around cities, they are forced to set up their enterprises in
the smaller towns away from big cities. This helps in the development of backward regions.
Dispersal of economic power
Industrial development normally may lesd to concentration of economic powers in a few hands. This
concentration of power in a few hands has its own evils in the form of monopolies. Developing a large
number of entrepreneurs helps in dispersing the economic power amongst the population. Thus it
helps in weakening the harmful effects of monopoly.
Better standards of living
Entrepreneurs play a vital role in achieving a higher rate of economic growth. Entrepreneurs are able
to produce goods at lower cost and supply quality goods at lower price to the community according
to their requirements.When the price of of the commodities decreases the consumers get the power
to buy more goods for their satisfaction. In this way they can increase the standard of living of the
people.
6) Creating innovation
An entrepreneur is a person who always look for changes. apart from combining the factors of
production, he also introduces new ideas and new combination of factors. He always try to introduce
newer and newer technique of production of goods and services. An entrepreneur brings economic
development through innovation.
Entrepreneurship also helps in increasing productivity and capital formation of a nation. In short, the
development of the entrepreneurship is inevitable in the economic development of the country. The
Role played by the entrepreneurship development can be expressed in the following words :
" Economic development is the effect for which entrepreneurship is a cause "
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