Economic development essentially means a process of upward change whereby the real per capita income of a country increases over by period of time. Before discussing and describing the role of entrepreneurship with economic development, it is necessary to understand the concept of economic development.
So, the economic development is not an event but it is a process which needs vision, hardwork and good strategy. It is an entrepreneur who searches for all favourable conditions, see needs and then brings together men, material and capital according to the plans in order to achieve the ultimate objectives. The entrepreneurship looks for the innovative ideas and puts them into effect for economic development. The entrepreneur occupies a crucial place in the process of economic development by acting as a trigger head to give spark to economic development.
The changing environment provides new opportunities for entrepreneurs and as a result entrepreneurship has positively affected the economic society.
Economic and Social Benefits of Entrepreneurship
(1) Creating Innovations – An entrepreneur is a person who always looks for changes. Apart from combining the factors of production, they also introduce new ideas and new combinations of factors of production. Development of new enterprises plays an important role in introducing goods and services to the economy. As the demand for product and services continues to grow and entrepreneur tries to introduce new techniques to fulfil the demand of the customers.
(2) Fuelling Economic Growth – Entrepreneurship helps in the development of small business. This is considered to be the effective way to ensure economic growth, preserve competition, competitive prices for quality products. Further these also create employment opportunities.
(3) Identifying Ownership Opportunities – Entrepreneurship helps people in identifying an option to the traditional job seeking path. New prospective entrepreneurs try to develop their own business enterprises by identifying viable innovative opportunities. Entrepreneurship offers people ownership opportunities where prospective entrepreneurs are supposed to work as job provider in place of job seekers.
(4) Bringing Change in Structure of Business and Society – Entrepreneurship brings change in the present structure of business in the society. New enterprise and new products change the way we do the business. This activity gives a new direction to the business and way of doing the business.
(5) Dispersal of Economic Power – Entrepreneurship creates the culture of industrial development in the economy. Industrial development generally leads to concentration of economic power in few hands. This further leads to monopoly. But now a days entrepreneurs are entering in the field and are establishing large number of industries in various sectors. Developing a large number of entrepreneur helps in dispersing the economic power amongst the population.
(6) Better Standard of Living – Entrepreneurship is an urge of an entrepreneur to act in a different way for achieving the success. Entrepreneur plays a vital role in achieving a higher rate of economic growth. He is able to provide the goods at lower cost and supply quality goods at lower price to the community. In this way, he contributes in increasing the standard of living of the people.
(8) Higher Productivity – Productivity is the ability to produce more goods and services with less labour and other inputs. Entrepreneurship is the quality of an entrepreneur to use the resources in an efficient and effective way. High Productivity is mainly a matter of improving production techniques and this task of the entrepreneur is function of par excellence.