Entrepreneurship plays a crucial role in the economic growth of the countries. It is an activity of undertaking business by bearing some financial risks with the hope of profitability. Apart from this, it is considered as a process of launching, designing and conducting new businesses. The persons who start or create these businesses and bear most of the risks are known as entrepreneurs. An entrepreneur is also known as an innovator, a risk-taker and a leader. While creating their business, he or she faced many difficulties such as hiring skilled employees, obtaining finance and attracting new customers. An entrepreneur combines land, labour, and capital to manufacture products and services for customers. Thus, entrepreneurship is a risk-oriented activity that generates wealth, innovation and economic growth.
Role of Entrepreneurship
- Helps in increasing jobs – Entrepreneurs are job creators instead of job seekers. A simple definition is that when a person became an entrepreneur then there is one less job seeker in the economy. An entrepreneur provides jobs to a number of job seekers in its new or existing business. In order to increase jobs through entrepreneurship, the government of many countries promotes and encourage new start-ups. Thus, entrepreneurship plays an active role to provide employment to various people.
- Wealth creation and economic development – By creating their business, an entrepreneur can invest in their own resources such as capital, debt, equity etcetera. The investment in their own resources mobilises wealth that results in the success of a business. Also, pooled capital results in wealth creation
- Balanced regional development – The business and industries growth in these domains leads to improvement of infrastructures such as rail links and better roads, airports, water supply and stable electricity, shopping malls, hospitals, schools and other private and public services which would not be available otherwise. Each new business which locates within a less developed domain will create indirect and direct jobs which help to increase the regional economy in various ways.
- Helps in the increasing standard of living – It increases the living standard of peoples within a community and it is considered as another primary aim of economic development. The entrepreneur does this by adopting and developing innovation which leads them to enhancement in the quality of life of their stakeholders, customers and employees within the community.
- Community development – It cannot be said that economic development can be always translated into community development. Community development needs infrastructure for healthcare, education, training, and other public services. For instance, skilled and highly educated workers are needed in a community in order to attract new businesses. If there is an educational institution, internship opportunities and technical training schools are required, which will help to develop the pool of skilled and educated workers.