Entrepreneurship is an essential part of economic development. It is quite logical, An entrepreneur pulls ahead of the process of economic development through maximum efficient utilization of unutilized natural resources, human resources, labour, and capital.
The pace of economic development and industrial progress is the reflection of the economy.
Hence, entrepreneurship has been accepted as the fundamental basis of industrialization and economic development.
In all types of economies, undeveloped, developing, and developed, the role of the entrepreneur is significant.
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Importance of Entrepreneurship
In the modern economy, the role of entrepreneurship and its importance may be explained as follows:
1. Pivot of Economic Development
Entrepreneurs are Wheels of economic development of the country.
They provide a valuable contribution to the development of the national economy.
They also materialize available opportunities for the working population of the country and their contribution to increasing national income is quite significant, as they are the person who functionally coordinates various sources of production.
Related: 18 Nature and Characteristics of Entrepreneurship.
2. Basics of Business
Every business involves various types of risks.
The business cannot be successful until someone is ready to bear the possible risk. Hence, entrepreneurs have been reckoned as the basis of the business.
3. Organizer of Associate is Productive Resources
The entertainer is the organizer of society’s productive resources.
He invests the unused resources of the society for productive purposes and makes their optimum utilization, so that the best products may be made available to the society at the lowest costs.
4. Contribution in Production of New Products
An entrepreneur explores the possibilities of new products, on the basis of new methods and inventions, for which the Resorts to research and development programs and make new products available in the market.
Related: 9 Characteristics of Entrepreneurial Development Programme.
5. Development of New Production Techniques
The entrepreneur always remains occupied in searching for new techniques of production.
He also includes and develops the techniques and executes the improved and changed techniques.
6. Help in Removing Regional Disparities
The entrepreneurs have played an important role in removing regional disparities and economic backwardness.
The government also attracts the private entrepreneur to establish industries in backward areas.
Backward areas are developed by making land and capital available to them.
7. Helpful in Capital Formation
In developing countries, entrepreneurship alone may have an important role in Breaking the unbreakable fort of capital and provide Momentum to economic forces in capital formation.
Some countries, Capital is obtained from the public and is invested for productive purposes.
The increasing demand for shares and debentures symbolizes this fact.
Related: 20 Types of Entrepreneurs (Informative Explained).
8. Development of New Market
The entrepreneur continuous efforts to maintain the regular supply of his products in the existing market.
Along with that, he also works for searching new markets and development of the existing market, which facilitates the expansion of the markets.
9. Establishment of New Industrial Enterprises
The business and industrial entrepreneurs do not feel contended only be establishing Enterprises, but they establish new Enterprises, to make the country self-reliant.
For example in India, Tata, Birla, Dalmia, Mufatlal, Singhania, Bajaj and Ambanis are among several entrepreneurs, who have established various Enterprises, one after another to develop the national economy.
Related: 20 Psychological Factors Affecting Entrepreneurship.
10. Help in Bringing Changes in Social Framework
Entrepreneurs are helpful in social changes that are acceptable to society.
The superstitions and traditional systems are losing their Grounds and the society now accepts scientific attitude.
Hence, the entrepreneur leads society towards progress, by adopting new techniques, producing new commodities, by establishing new industrial ventures, by generating new employment opportunities, and by Building New and progressive environment.
Related: 21 Importance and Role of Entrepreneurs.
11. Contribution to the Formation of Industrial Climate
The entrepreneurs motivate other entrepreneurs, by planning and establishing new industries.
As a result, the industrialization and economic development get the speed and conducive industrial climate is created.
12. Contribution to rising the Standard of Living
The entrepreneurs have given birth to materialization by new techniques, new products, and inventions which have helped in raising the living standards of people.
Besides, the working efficiency of people has also gone up.
13. Encouragement to Investigation and Research
Since the main function of the entrepreneurs is to adopt innovations, Hence it encourages the development of scientific attitude in the economy and Research, investigations and inventions.
That way, the interests of the whole society are promoted.
Related: 37 Essential Qualities of Successful Entrepreneur (Must Know).
14. Contribution to Generate Employment Opportunities
The unemployed persons of the society get maximum employment opportunities, directly and indirectly by the development of new products, new Enterprises, and market expansion, which is also helpful in the eradication of poverty in the country.
The entrepreneurs widen the path to balance economic development, which liberates the country from a vicious circle of poverty.
“In developing countries, the entrepreneur is the provider of employment opportunities.”
15. Contribution in Development and Expansion of Existing Enterprises
Entrepreneurship assumes an important role in the development, innovations, and expansion of the business.
Entrepreneurs make regular efforts for increasing the number of products by their existing Enterprises, modernizations of the existing production process, producing new commodities, developing their Markets and increasing the clientele.
Thus, These are the Importance of Entrepreneurship in the Modern Economy.
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