The entrepreneurs have an important role in encouraging the economic development or growth or progress of any country. He is the person who makes possible the maximum utilization of resources available in the country as an individual or in a group.
Due to the lack of efficient and capable entrepreneurs, many countries are lagging behind in economic progress, in spite of being rich in natural resources.
Japan, Germany, the USA, and China are the leading economically developed nations of the world mainly due to the efforts made by the industrial entrepreneurs of those Nations.
It may be rightly stated that the economic development of any nation or standard of living of its people largely depends upon the role of the entrepreneur.
What is the Role of Entrepreneur in Economic Development?
The role of the entrepreneur in encouraging and boosting economic progress or growth may be explained as follows:
1. Establishment of New Single Business Enterprises
The entrepreneur does not establish a business enterprise but makes consistent efforts for the establishment of a series of new enterprises.
The entrepreneur establishes new business enterprises and hands over it to the managers and again get in indulged in the establishment of the new enterprise. This process is continued.
2. Basis of Modern Business
For each type of business, large or small risks and uncertainties of various natures always prevail.
Hence, it has been rightly stated that ‘Business is the game of risk’ and that ‘Business is full of risks‘.
The question of starting the business does not arise, till some person is not ready to face the risks.
The risk is faced by the entrepreneur because he is efficient and capable to face the odds and the risks for starting any business.
So, people regard the entrepreneur as the basis of modern business.
3. Leader of the Whole Industry
The role of the entrepreneur may be viewed as the leader of the whole industry.
He not only bears the business risks but is also the economic planner of the industry, foresighted, inventor of new methods of production, builder of the economic structure of the country and the person to keep full watch on the activities of the competitors.
That is why the entrepreneurs as the captain of the industry.
4. Organizer of the Society’s Productive Resources
The entrepreneur is the organizer of sources for the production of society.
Of course, the entrepreneur combines sources of production of the society, in suitable proportions, establishes effective coordination between them, make them dynamic and makes efforts for maximum and best Possible production, at the minimum cost, Not only that, but he also finds out new uses of raw materials & semi-finished products and also gives materials shape to the new inventions.
5. Balanced Rapid Economic Growth
Entrepreneurs have an important role in the economic development of the country.
They explore business opportunities and establish a series of new industries to avail of these opportunities, develop new techniques of production and make the production of new products.
Therefore, industrial activities in the country get encouragement and balanced economic development goes on moving.
Lack of entrepreneurs is the main obstacle to economic development.
6. Capital Formation
The entrepreneur contributes to capital formation. We know that the high rate of capital formation is quite essential for the economic development of any country.
The countries that are not able to increase the rate of capital formation or continue to lag behind in industrial growth.
The entrepreneur increases the rate of capital formation by establishing new units and providing employment opportunities.
Only the entrepreneur can play an important role in breaking the unbreakable fort of capital in the developing nations and can provide Momentum to the economic forces for capital formation.
7. Establishment of Self Sufficient Society
The establishment of a self-sufficient society is possible only by the productivity revolution in various areas of production in the country.
The developed entrepreneurs have to fulfill the requirements of the local community by increasing production of the business enterprises, to meet local requirements as well as for export promotion.
As a result, standards of living of people, in employment and productivity will increase.
Savings and capital formation will also get encouragement.
The imports can be reduced and the dream of the establishment of self-sufficient society will get materialized.
8. Creation of Industrial Environment
The entrepreneurs are also pioneers to create an industrial environment, as the entrepreneur’s new enterprises, arrange required resources, face risks and uncertainties and take innovative activities.
They also motivate other persons to establish industries.
As a result, a suitable industrial environment gets developed and the number of the establishment of new industries goes on increasing consistently.
9. Removal of Regional Disparities
Regional disparity weakens the country. It is an obstacle to Industrial development.
The entrepreneur has a significant contribution to the removal of regional disparities by establishing new industries in backward areas.
It results in the emergence of equal and balanced economic development.
It also ends the regionalism and brings uniformity in all levels of society.
10. Development of Entrepreneurial Traits
The entrepreneurs lead an independent life, become self-sufficient and high targets of life.
Entrepreneurs may develop creativity among people.
As a result, activeness develops people and the establishment of a happy and prosperous society becomes easier.
11. Development and Expansion of Existing Business Enterprises
An entrepreneur not only establishes new business and industrial enterprises but also develops and expands the existing enterprises.
The development and expansion are in all areas, like, improvement in quality and volume of the products, modernization of production process, find the new market and expansion of existing markets, etc.
The entrepreneur plays an important role in development, expansion and new innovations of the business.
12. Development of New Production Techniques
The entrepreneur feels to replace old techniques with new techniques.
So, he consistently continuous to make new inventions and discoveries in the field of production.
As a result thereof, the consumers get the best qualities of the product at low prices.
The standards of living of the consumers improve and develop, by improved methods and techniques.
13. Removal of Poverty
The continue to be poor, due to lack of industrial development.
Entrepreneurs have an important role in eradicating poverty.
By establishing new industries, they provide substantial employment, which enhances the per capita income, the vicious circle of poverty can be broken.
Thus, an entrepreneur has a distinct role in the removal of poverty and raising of standards of living of the people.
14. Increase in Employment Opportunities
Series of new industries are established by the development of the enterprises and the expansion and development of the country provide employment to the high number of persons.
In developing countries, the entrepreneur is the person to provide opportunities for employment.
15. Minimize Socio-Economic Problems
As a result of the development of entrepreneurs, business enterprises in various parts of the country established.
It will minimize the various problems, like, class conflict, pollution of the environment, the prevalence of slum areas and social crimes, etc. In the cities.
By development of business activities in the villages, social evils like Dowry and intoxication, etc. can be reduced and the attention of people will start do divert wasteful expenditure into savings and capital formulation.
Thus, now you know What are the roles and responsibilities of an entrepreneur in economic growth?