Role of Entrepreneurship in Economic Development

Before discussing the role of entrepreneurship in the economic development of a country, let us discuss who is an entrepreneur and what is entrepreneurship, and the types of entrepreneurship in brief. We will also discuss the challenges or the difficulties faced by the entrepreneurs and the ways to eliminate those difficulties, later in this article.

 

Who is an entrepreneur:

An entrepreneur is a person who establishes and succeeds in startups or businesses in which risk and profits are involved.

(A startup is a new company started by one or more entrepreneurs with an aim to develop a unique product or service and introduce it into the market.)

Entrepreneurs are passionate to bring change and have a certain set of skills too.

They bring new ideas and innovation in existing services by modifying the old ones due to change in demand or perception of the customer.

What is entrepreneurship:

Entrepreneurship is the process of developing startups and businesses and generate profit with risk in the changing global markets.

Entrepreneurship involves creativity, innovation, and growth through enterprises where entrepreneurs take action which leads to success through entrepreneurship.

Types of entrepreneurship:

Small business entrepreneurship:

Small business entrepreneurship is those in which the majority of people get involved in small businesses for their day-to-day life and to run their families. For example grocery shop and Book Stall etc.

Large Business Companies:

Mainly started by the experienced professionals where innovation is preferred according to consumer demand. Such businesses grow very rapidly and create consumer choices. For example Microsoft, and Google.

Scalable Business Entrepreneurship:

In this kind of entrepreneurship, the scope to change the world through technology intervention by using the internet. Such business initiatives are very unique in nature and cover a huge range of people and used for various purposes some examples are Facebook, Instagram, and LinkedIn, etc.

Social Business Entrepreneurship:

In such businesses, solution of social problems are priorities through community involvement and finding an innovative idea which solves the social problems like poverty, education, and health. These types of enterprises are mainly nonprofit in nature and work at the ground level.

Innovative Business Enterprises:

Focus on the innovation of new ideas, facts, data and create new capital and extraordinary thought which change the generation through their action. For example Steve Jobs, Bill Gates, and Elon Musk.

 

Role of Entrepreneurship in Economic Development:

Entrepreneurs or entrepreneurship plays a very important role in the development of the country’s economy. It covers almost every section of society.

Some of the important roles of entrepreneurship in economic development are given below;

1. Improves standard of living as it provides jobs to people it also covers social security lead to improved standard of living.

2. Innovation as new technology involvement in new Startup, lead to creating innovation.

3. Income improvement as entrepreneurs provides a link to the supply chain which creates demand and provides income.

4. Involvement of community as it procures raw material from the community in various sectors through involving the community.

5. Job creation as entrepreneurs provide skill and engaging them in enterprises provide huge jobs.

6. Regional balance as urban areas are the engine of the economy, but rural areas are also important to developing the region, leading to regional balance.

7. Export promotion: Good quality of product leads to more exports which eventually leads to improved forex reserves.

8. Capital formation as for any entrepreneur the capital requirements are a basic need to create the capital formation.

9. Opportunity provider as it creates an equal opportunity to all the skilled person for their growth.

10. Decreased imports: If a good enterprise creates a good product, It will lead to a decrease in imports from foreign countries which will create a low fiscal deficit for the country.

11. Atmanirbhar Bharat as our country want to become self-reliant, the role of entrepreneurs is important.

12. Supply chain management as a new entrepreneur creates a linkage between the urban demand and rural supply. It fulfills the gap between the urban-rural divide and strengthens the supply chain.

Moreover, entrepreneurs focus to eliminate the digital divisions as well as providing accessible services. It also focuses to minimize the urban-rural divisions.

 

How to develop the entrepreneurs or the entrepreneurship?

From the above-mentioned points, it is clear that entrepreneurs are very important for the economy of any country. Hence, it is very important to develop entrepreneurs and entrepreneurship for the growth of its economy.

So we will also discuss some of the factors which impact the development of entrepreneurs and entrepreneurship.

  • The policy of the government
  • Education system
  • Focus on research and development
  • Academia collaboration
  • Inter and Intra ministries coordination
  • Skilling and reskilling
  • Training and vocational education
  • Availability of capital, labour, and input materials
  • Political stability
  • Geographical location
  • Infrastructure availability
  • Market access

 

Challenges:

But there are some challenges which act as a barrier. So there is a need to remove the following barriers and  create an ecosystem friendly environment for the development of entrepreneurship and entrepreneurs and it can be done through;

  • Transformation in the education system
  • Create a national policy
  • Provide training for leadership roles
  • Provide guidelines rules and regulation
  • Build favourable ecosystem through infrastructure
  • Provide available funding
  • Tax incentive through the tax deduction
  • Participation approach of public and private
  • Collaboration with the Academy
  • Collection of data and analyze it
  • Leverage the technology like ICT AI internet of things
  • Provide proper marketing and advertisements

In the end, It can be concluded that there is a need to minimize the bureaucratic hurdles and provide a flexible approach which could avoid the one size fit policy and the patent regime should be according to our need. The incentives from the giant Tech companies are very important to guide the infant one.

 

If you are an aspiring entrepreneur and want to learn about the Government initiatives about the startups, Click here.

This article is written by;

Mr. Pankaj Kumar Gupta

(Email ID: [email protected])

Leave your thoughts