The industrialization and pace of economic development of a country depends on the entrepreneurs of the country. The country may be rich or inherited with plenty of natural resources, but its economic development is impossible in the absence of entrepreneurs.
This is one of the big reasons India remained underdeveloped for many years. It is the entrepreneurs of the country who contribute towards a balanced development of the country by using its resources efficiently.
An entrepreneur is considered to be the main focal point in the economic development process. The renowned economist, Marshall observes that an entrepreneur is the capital of the country and plays an important role in building the economic structure of a building.
But what are the roles of entrepreneurship in economic development?
Here are 7 roles of entrepreneurs in an economic development
Wealth creation and sharing
When entrepreneurs establish their business entity, they invest their own resources and attract capital from their investors, public, and the lenders. This mobilizes the public wealth which allows people to benefit from entrepreneur’s success and growing business. This capital resulting in wealth creation and distribution is one of the most basic goals and imperatives of economic development.
The definition of entrepreneurs is job creations opposite to job seeking. In simple words, when a person becomes an entrepreneur, there is one less unemployed person in the economy. This kind of job creation by new business is one of the basic goals of economic development. This is also why the indian government has launched initiatives like StartupIndia to promote and support new and budding startups alongside other startups like ‘Make in India Initiative which is to attract foreign companies and their FDI into Indian economy.
Balanced regional development
When entrepreneurs set up their new businesses and industrial units in backward or less developed areas, it helps with regional development. The growth of business and industries in these areas leads to improvement in infrastructures such as better roads, airports, rail links, water supply, and water supply in hospitals, schools, shopping malls and other private and public services that would probably otherwise nott be available.
Every new business that is set up in a less developed or backward area will not only create more direct and indirect jobs, but also help lift regional economies in many different ways. All this adds to local and regional economic output. Both state and central governments will promote this kind of regional development by providing registered MSME businesses various concessions and benefits.
GDP and the per capita income
Did you know, Indian MSME sector which comprises 36 million units that provide employment for over 80 million people, now accounts for more than 37% of the country’s GDP. each and every new addition to these 36 million units makes use of resources like labor, land, and capital in order to develop services and products that add up to the national income, national product and per capita income of the whole country. This growth in GDP and the per capita income is again one of the essential goals of economic development.
Standard of living
The increase in the standard living of people in a community is also another key goal of economic development. And entrepreneurs again play an important role in increasing the standard of living in a community. They do this by creating jobs and adopting and developing innovations that lead to improvements in the life quality of their employees, stakeholders, and customers in the community.
Any business that is growing will eventually want to start exports and expand their business to foreign markets. This is a key ingredient of economic development since it leads to big markets, currency inflows and access to the latest cutting-edge technologies and processes being used in foreign markets that are more developed. Another benefit from this is that this expansion of exports leads to more stable business revenue during economic fallbacks in the local economy.
It is not necessary that economic development always transfer into community development. Community development requires infrastructure for training and educating, healthcare and other public services. We need highly skilled and educated workers in a community to attract new businesses. If there are technical training schools, educational institutes, and more internship opportunities present, it will help build the pool of skilled and educated workers.