The entrepreneur has an important role in the development of any country, the reason being that an entrepreneur is that person or group of persons that make the maximum utilization of resources of production possible available in that country.
Thus, modern economists are of the strong opinion that the entrepreneur is not only the independent and important factor of production, rather he is the ‘creator of development’.
He is the central point of an initiator of total economic activities.
He adds to the economic social well being of the countrymen and provides a significant contribution in raising their living standards.
Role and Importance of Entrepreneur
The role and importance of entrepreneur may be explained, as follows:
1. Basis of Business
Businesses either of small scale or large scale, all have various types of disc risks and uncertainties persisting at each step.
Hence, it is said that business is the game of risk and business is full of risk. Till a person is not ready to bear them, the question of starting a business does not rise.
The efficient and capable entrepreneur alone may start the business by bearing the risk.
Hence, the entrepreneur is regarded as the basis of business and prophet of business.
2. Organizer of the Society’s Productive Resources
An entrepreneur is the organizer of society’s productive resources.
He is the person who assembles the unused natural, physical and human resources of the society, combines them properly, establishes effective coordination between them, makes the economic activities dynamic, makes possible the optimum use of sources, makes efforts for the best and maximum production at minimum cost, controls their misuse and wastages and also creates their new utilities and work for development of new areas and dimensions.
Not only that, he discovers various new uses of raw materials and semi-finished products and also gives material shape to the new inventions.
3. Creation of Industrial Environment
The entrepreneurs are also helpful in the creation of an industrial environment.
The industrial entrepreneurs always remain in search of industrial opportunities and create such an environment, which inspires others also to establish the industries by themselves establishing industrial ventures by arranging the necessary sources, by bearing uncertainties and by performing innovations.
Thus, Industrial entrepreneurs create industrial awakening and industrial environments in the country, with the help of their various activities.
4. Captain of Industry
The entrepreneur is the captain of modern industries.
The entrepreneur has some important place in industries, as the captain has in the games, the general in the army and the prime minister in the cabinet.
The entrepreneur is the captain of the industries because he only bears the risks and uncertainties, but he is also the manager, predictor, inventor of new production methods and the builder of economic structure to maximize profits on one side.
He keeps a complete watch on internal management of the industry, and on the other hand, he also keeps a complete watch on the activities of his competitors.
5. Removal of Poverty
The people remain in the grip of a vicious circle of poverty if adequate Industrial Development lacks in any country.
But, the entrepreneur increases employment opportunities by establishing new industries, also increase per capita income and rate of capital investment, utilize innovations in various fields, establish effective coordination between sources and manage the economic affairs with efficiency.
All these activities prove highly helpful in bringing the people of the country, out of the vicious circle of poverty.
Thus, the entrepreneur contributes to the removal of poverty.
6. Helpful in Capital Formation
The entrepreneur is helpful in capital formation also. We know that the increase in the rate of capital formation is quite essential for the economic development of any country.
Those nations which are not able to increase the rate of capital formation or do it nominally, remain backward from industrial development’s point of view.
However, the entrepreneur increases the rate of capital formation in his activities.
Hence, In developing countries, the entrepreneur alone may assume an important role in Breaking the unbreakable fort of capital and may provide stimulation to economic forces in capital formation.
7. Assists in Removing Regional Disparities
Regional disparities weaken the country and are an obstacle in the overall industrial development.
However, the entrepreneur plays important role in the removal of these regional imbalances, reason being that he establishes new industries in the backward areas of the country and also makes their development and expansion, through the governments of the country also provide special rebates, concessions, and subsites for establishment of industries in undeveloped and backward areas.
8. Increases in Employment Opportunities
The Entrepreneur creates maximum employment opportunities in the society, by way of establishing new industries, developing and expending the existing industries, and undertaking innovative activities.
As a result, unemployed persons in society get opportunities for employment. Accepting it,
“The entrepreneur makes available employment opportunities in development-oriented countries.”
9. Encouragement to Investigation and Research
Since the main function of the entrepreneur in the developed Nations is to carry out innovations, the entrepreneur encourages new techniques of production, takes risks in using new machinery and equipment, develops the scientific approach and develops new markets also.
As a result, investigations, and Research get encouragement, which ultimately benefits society.
10. Search of New markets and Development of Existing Markets
The entrepreneur does not feel satisfied with the existing market products but continuously goes on searching for new markets for sale promotion and also develops the markets.
Besides, an entrepreneur is also regularly occupied in developing and expanding the existing markets.
For all these, he uses various techniques and methods, like market research, motivation research, buying habits survey, consumer satisfaction, advertisements and sales promotions, product diversifications, incentives to intermediaries and sellers, etc.
11. Development of New Production Techniques
The entrepreneur does not feel contended only with the existing techniques of production.
Hence, he carries out various experiments for saving time, labor and capital in the production, as also to improve the variety and quality of the product and service.
He also arranges research and uses methods like management by changes, etc.
As a result, consumers regularly get good quality products and low prices.
I cause improvements and a rise in the living standards of the consumers.
12. Development of Suitable Raw Materials
The Entrepreneurs also work for the search for new sources of raw materials and semi-finished products, and for the development of their alternative substance.
By it, not only economic savings may be obtained, but the economy may also be saved from different types of crises, by getting a suitable alternative for scarce, Limited and importable raw materials.
13. Helpful in Changing the Social Structure
Since the entrepreneur remains attempting in executing innovations in each area and activity and at all levels, inclination towards the scientific approach, logic, changes, and inventions develops in the society and hence people easily get ready to accept the changes in unfair traditions, customs, superstitions, and social evils, etc.
Hence, the entrepreneur has an important role in changing the social structures and the changes become easy also.
14. Contribution to the Execution of Government Policies
The entrepreneurs provide an important contribution in implementing government policies and achieving the national goals.
The entrepreneurs cooperate with the government for implementations of development plans of the country, for establishing a balance between imports and exports and for encouraging balanced development.
Thus, the entrepreneurs widen the path of development by joining hands with the government.
15. Establishment of New Business Enterprises
The entrepreneur does not get satisfied only by the establishment of a business enterprise but goes on making efforts by the establishment of several new business enterprises.
In this regard, the entrepreneur after establishing the enterprise hands over in the hands of the efficient managers, and they themselves get occupied in the establishment of another new business enterprise.
Thus, the entrepreneurs go on establishing the business enterprises, one after the other.
16. Production and Distribution of New Products and Services
The entrepreneur tries to work out the possibilities of production and distribution of new products and services through innovations, inventions, and experiments and thereafter presents such products and services in the markets.
The entrepreneurs are always attentive towards the possibilities of new commodities and services and in this Direction, they are always occupied in Research and studies, etc.
17. Minimizes Socio-economic Problems
The entrepreneurs increase the incomes, Savings and capital formation by establishing business enterprises and encouraging industrial ventures.
It reduces various social problems, like poverty, illiteracy, low living standards, dowry system, social offenses, atrocities on women, and exploitation of child labor, etc.
In addition, the entrepreneurs also help in reducing the problems prevailing in the towns and cities, like polluted environment, overcrowding, slum areas, and conflicts, etc.
by reducing the economic imbalances and disparities prevailing in various areas.
Thus, entrepreneurs have an important role in reducing socioeconomic problems.
18. Optimum Utilisation of Resources
The entrepreneur makes optimum utilization of natural and human resources available in the country.
Like natural wealth, raw materials, Minerals, and human skills, etc.
Not only that, but the entrepreneurs also enhance national productivity by efficient utilization of unused resources, with their managerial skills.
The entrepreneur shifts the economic resources from low productivity areas to high productivity areas.
19. Establishing Self Sufficient Society
The entrepreneur has a significant role in building up of self-sufficient society.
The entrepreneur may bring a revolution in productivity.
The entrepreneurs may increase the exports of the country, along with fulfilling the national requirements.
Similarly, entrepreneurs alone may be helpful in increasing capital, wealth, assets, employment, income, etc.
20. Role in Social Responsibilities
The industries are being established, due to assuming responsibility by entrepreneurs.
The regional imbalance is also improving. New avenues of employment are opening, various new commodities and services are being produced and distributed and the consumers are getting these at the lowest possible cost and the economic social problems are continuously decreasing.
Thus, The entrepreneur is fulfilling responsibilities towards all sectors of society.
21. Contribution to Rapid and Balanced Economic Growth
The entrepreneur is not only the basis of business but is also the basis of rapid and balanced economic growth because the entrepreneurs search for industrial opportunities and establish various new industries to utilize those opportunities, which result in the rapid economic development of the country.
Besides, the entrepreneurs also provide an important contribution to the balanced economic development of the country, by removing provincial and regional disparities through the establishment of industries and business and economically backward areas also.
“The entrepreneurs widen the way of Balanced economic development.”
Entrepreneurs are at the root of the present-day economic development of countries like America, Britain, France, and Japan.
In India, the level of economic development is very low, mainly due to the reason that in India, entrepreneurs are lacking.
So, we may say that the entrepreneur alone transforms the unused sources of production into the production, removes economic stagnation and brings a country in the category of developed nations by providing self-sufficiency to the nation.
Thus, now you know the role and importance of an entrepreneur.