Entrepreneurship plays a significant role in the country’s economic development and standard of living. Being a startup founder or small business owner, you may believe that you just work hard to build your own business and serve yourself and your family. But in reality, you do a lot more for your local community, state, region, and country.
Japan, Germany, the USA, and China are some of the leading economically developed nations of the world, primarily due to the efforts made by their industrial entrepreneurs.
So, to understand it precisely, in this post, we will learn about the role of entrepreneurs in economic development.
Role of Entrepreneurs in Economic Development
1. Exposing the local market to a wide range of foreign opportunities
As a business evolves, so will the opportunities. Exporting is considered to be a big step for every business out there, but it is still a dream of every entrepreneur to expose themselves to new markets.
With the help of entrepreneurship, local communities can export their products and make more professional collaborations. The bases of entrepreneurship allow for that to happen. In addition, depending on the type of entrepreneurial venture, you can notice more potential ways that improve local finances.
2. Leader of the Whole Industry
The role of an entrepreneur in economic development may be considered as the leader of the whole industry.
An entrepreneur not only handles the business risks but also acts as the economic planner of the industry, visionary, inventor of new methods of production, builder of the economic structure of the country, and the person to hold a complete watch on the activities of the competitors.
Therefore, entrepreneurs are known as the captain of the industry.
3. Community Development
Economic development doesn’t always lead to community development. Community development demands infrastructure for education and training, healthcare, and other public services.
For instance, you must be a highly educated and the skilled worker in a community to entice new businesses. Educational institutions, technical training schools, and internship opportunities will allow you to build a pool of educated and skilled workers.
4. Diminishing Social Tension and Differences Amongst Youth
We all know that many problems associated with youth unrest and social tension are rightly considered due to youth not being employed in productive work. However, in the changing environment where we are confronted with the problem of recession in wage employment opportunities, the alternative to a wage career is the only possible option.
Therefore, the country must invert youth from wage careers to self-employment careers with latent entrepreneurial traits. Such an alternate path through entrepreneurship could help the country lower social tension and unrest amongst youth.
5. Balanced Rapid Economic Growth
Entrepreneurs play a crucial role in the economic development of the country.
They analyze business opportunities and found a series of new industries to avail of these opportunities, create new production techniques, and produce new products.
Therefore, industrial activities in the country get motivation, and balanced economic development continues. However, the lack of entrepreneurs is the main barrier to economic development.
6. Removal of Regional Disparities
Regional disparity strains the country. It is an impediment to industrial development.
The entrepreneur contributes to dismissing regional disparities by setting new industries in backward areas. It brings equality and balanced economic development It also terminates regionalism and brings uniformity to all levels of society.
7. Economic independence
Entrepreneurship becomes crucial for national self-reliance. Industrialists allow manufacture indigenous substitutes of imported products, decreasing dependence on foreign countries.
Businessmen also export goods and services on a large scale and make a scarce foreign exchange. Such import substitution and export promotion support the country’s economic independence, without which political independence has little meaning.
8. Capital formation
Entrepreneurs mobilize the nonfunctioning savings of the public through the issues of industrial securities. Investment of public savings in the industry leads to productive utilization of national resources. The rate of capital formation boosts, which is essential for rapid economic growth. Thus, an entrepreneur is the creator of wealth.
9. Standard of Living
Rise in people’s living standards in a community is yet another crucial goal of economic development. Entrepreneurs furthermore play a key role in improving living standards in a community.
They do this not just by generating job opportunities but also by creating and adopting innovations that enhance the quality of life of their employees, customers, and other stakeholders in the community.
For instance, automation that lowers production costs and allows faster production will make a business unit more productive while also supplying customers with the same goods at lower prices.
10. Backward and forward links
An entrepreneur incites change in which there is a chain reaction. There are multiple backward and forward linkages while launching an enterprise. For instance, the setting up of a steel plant forms many ancillary units, and the demand for iron ore, coal, etc., grows.
There are backward relationships. By boosting the steel supply, the plant facilitates machine manufacturing, tube making, vessel manufacturing, and the development of other such units.
Entrepreneurs build an atmosphere of enthusiasm and convey a sense of purpose. They give an organization its momentum. Entrepreneurial behavior is essential to the long-term vitality of every economy. The practice of entrepreneurship is as vital for established firms as it is for newcomers.
Conclusion
So, entrepreneurs have a critical role in sparking economic development by initiating new businesses, producing jobs, and enhancing key goals such as GDP, exports, the standard of living, skills development, and community development.
The relationship between entrepreneurship and economic development is important for policymakers and business owners.
Comprehending the advantages and disadvantages of entrepreneurship permits a balanced approach to nurturing entrepreneurship, which can, if handled correctly, leads to a positive economic and societal impact.
So, after reading this blog, we realize that role of entrepreneurs in economic development can’t be neglected.
Read More
- What Makes a Successful Entrepreneur? Everything you Need to Know
- 10 Must-Have Skills of an Entrepreneur | You Must Adopt
Business Talk is a digital business magazine that caters to CEOs, Entrepreneurs, VC, and Corporates. While working with entrepreneurs and business executives, we focus not only on their achievements. Our mission is to shed light on business entities, including their innovations, technological benchmarks, USPs, and milestones/accolades.
