Entrepreneurship is a process that helps to organize, develop and run a business enterprise so as to earn a profit in spite of all the uncertainties associated with the venture. It is described as the willingness to launch a new venture and the ability of an entrepreneur to find new life-changing solutions to existing problems, increase demand in the market and provide jobs for a skilled workforce to enhance the society and the economy of a nation.
Entrepreneurship has been the source of income for a government and is considered the key to growth and development of a country. Their success is the success of the whole nation as it improves the living conditions of people for the betterment of society. It has the ability to initiate social change by creating innovative products.
1. Importance of entrepreneurship in developing countries
Entrepreneurship is very important for the economic development of a country and the nature of a developed economy is quite different from that of a developing economy. The importance of entrepreneurship in developing countries is as follows
1. Employment generation
When the entrepreneur starts a new venture he is providing employment opportunities to himself as well as numerous other people who will be associated with his company. Unemployment is a serious issue in developing countries and entrepreneurship helps to address it successfully so that it can result in the economic development of that country
2. Balanced economic development
Small business needs low investment and can be started in semi-urban and rural areas. It uses local resources and thus creates employment opportunities and prevents people from migrating to urban areas. The backward regions become developed and the growth of industries and business enterprises in these areas leads to public benefits like education, health, road transport, and entertainment, etc.
3. Small business plan dynamism
The structure of the medium and small business is not as complex as large business enterprises and thus involves smooth and quick decision-making and communication process. It results in high mobility and flexibility in small businesses than in large enterprises. Entrepreneurs who are running small and medium businesses are able to face challenges more admirably than the managers who are employed by large business houses. This great dynamism is an integral part of a small business plan.
4. Promotes capital formation
The funds that are sitting idle are utilized effectively by entrepreneurs. They use a mix of borrowed and personal funds and this leads to capital formation and creation of wealth that is an important component for the development of a developing country
5. Innovation in enterprises
Small business enterprises have a high capability and need to innovate as their survival is dependent on it. The entities can be innovative because they are not faced with the same constraints that large business entities have to face.
Entrepreneurship helps to manufacture substitutes of imported products that ultimately minimizes the dependence on other countries for imported products. The chance of exporting surplus goods also increases and this helps to earn foreign exchange. At the end of the day, it ensures economic independence and self-reliance.
7. Better standard of living
Entrepreneurship leads to the production of goods at low cost and supply of qualitative products and services at a lower rate in society. The low price of commodities gives the consumer the option to purchase products as per their satisfaction. This results in a better standard of living
2. Importance of entrepreneurship in society
Entrepreneurship helps to create a high quality and stable community life in society. Its importance is
- Entrepreneurship inspires social development as a portion of their income is spent on the education of poor children.
- The entrepreneurship participates and encourages their employees to participate in national development initiatives
- Entrepreneurship inspires young people and students to be responsible for the nation
- It makes investments in growing and manufacturing natural resources
- The job opportunities help to increase the standard of living of the people in a society
- Entrepreneurs give monetary donations as part of the charity. They not only earn but donate money in organizations and foundations. They also try to meet several other needs of the common or poor people by offering food, freshwater and healthcare services
- Entrepreneurs offer their support to like-minded individuals and are ready to invest in these as well as other community projects. They finance good causes related to public health, sanitation, recreation, education, etc and this felicitates development of society as a whole.
3. Importance of entrepreneurship in the school curriculum
Introducing the concept of entrepreneurship in the school curriculum will help the students to act in a responsible manner and decide beforehand whether they are suitable for such ventures. Its importance is
1. Thinking skills
The entrepreneurship course encourages thinking skills in a student so that they can understand the concept and come up with some original ideas
2. Learning a business
Students generally practice interviews with entrepreneurs by writing important questions and conducting interviews. The information is compiled together so that the students can have discussions about the products, place and marketing strategies of the business
Students are encouraged to show their creativity by imagining different concepts and possibilities. This facilitates a better understanding of entrepreneurship in them that will prove a blessing if they choose it as their career option
4. Research skills
It encourages research skills in students that will be a great help to them later in life
5. Better future
If the students learn about finance in the early years it will help them to use money in an effective and wise manner when they themselves become entrepreneurs.
4. Importance of entrepreneurship in economic development
Entrepreneurship has the capability to change the way people live and work in a country. The importance of entrepreneurship in the economy is
1. Encourages economic growth
It is a source of income to the government as all types of business entities have to pay taxes. This amount is used by the governments in investing in struggling sectors, human capital and other facilities like schools, college, roads, highway, etc that will encourage economic growth of the nation
2. Increase demand
Entrepreneurship helps to increase the demand for services and goods
3. Adds to national income
Entrepreneurship helps to create improved services and products and this encourages the development of new markets and the creation of new wealth. Higher earnings, increased opportunities for employment and higher tax revenues add to national income.
4. Creates social change
Unique goods and services introduced by entrepreneurs reduce dependence on old-fashioned technologies. It leads to improved morale and quality of life. The greater economic freedom creates social change that is for the betterment of society
5. Promotes research and development
Entrepreneurship provides necessary funds to research institutions and research and development facilities and universities so that they can make innovative products, services, and technology.
Pinky is an MBA in Marketing from the University of Mumbai. She loves helping people out in learning Marketing and sharing latest ideas and tactics for growing businesses.