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
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.