Importance of Entrepreneurship
Entrepreneurship plays a pivotal role in the economic development of a country. The following points highlight the significance of entrepreneurship.
Entrepreneurship and innovation are closely intertwined with each other. It is no exaggeration to say that innovation cannot happeninanycountrywithoutentrepreneurship. Entrepreneurs have contributed in no small measure to economic development of any country by innovation. They bring about innovation by building a brand new product or by constantly upgrading existing product or by tapping new market for existing product in a new territory or by inventing a new technology to produce a product or service and so on. All these innovative exercise ensures rise in income and output in the economy.
2. Contribution to Gross Domestic Product (GDP)
Promotion of entrepreneurship all across the country would undoubtedly add to Gross Domestic Product and National Income of a country. It is stated that the countries like America, Japan, Germany and so on have recorded a phenomenal increase in the GDP, per capital income and national income, due to stupendous growth of entrepreneurship.
3. Balanced Regional Development
Encouragement of entrepreneurship in under developed and undeveloped regions of a country through various incentives and concessions is more likely to promote balanced regional development across the country. Besides, essentially it checks the migration of rural population to urban centres in pursuit of employment.
4. Export Promotion
Entrepreneurship helps a country not only earn precious foreign exchange but also preserve it. If entrepreneurship is encouraged to produce export oriented goods, it can significantly add to foreign exchange reserve of a country. Similarly, if entrepreneurship is encouraged to produce products which are usually imported from foreign countries i.e. import substitute goods, it can help the country save precious foreign exchange. The comfortable foreign exchange reserve position is more likely to address the adverse balance of payment position if any.
5. Full utilisation of Latent Resource
Promotion of entrepreneurship across the country leads to better utilisation of economic, human, material and natural resources which would remain otherwise unutilised in a country. In other words, establishment of small, medium and micro enterprises all over the country paves way for harnessing all latent resources in the country.
6. Reduction of Concentration of Economic Power in Few hands
Promotion of entrepreneurship by encouraging small, medium and micro enterprises prevents the concentration of economic power in the hands of few large entrepreneurs. It promotes faster industrialisation and brings about equitable distribution of wealth in the society.
7. Better Standard of Living
Entrepreneurs provide a lot of well being measures to their employees besides paying salaries and wages. This unmistakably helps employees upgrade their standard of living. Some of entrepreneurs who have genuine concern for the welfare of the general public, supply goods of good quality at fair price. This in turn helps consuming public save more money and spends liberally on comfort and convenience goods which are supposed to enhance the standard of living of the general public. Higher standard of living brought about by entrepreneurship narrows down the gap between haves and have nots.