There are several effective means through which a country can develop its economy, one of them is by promoting entrepreneurship among its working-age populace. Countries with average to standard percentages of entrepreneurs generally tend to experience significant economic growth as entrepreneurs can serve as the driving forces for industrialization in their respective communities.
No matter the size, private business startups typically strive to make a profit and ensure the continuity of their business. However, they significantly extend their services to their localities and country generally in the process.
One of the ways entrepreneurship fosters economic development is through capital formation. This is perhaps the most important role entrepreneurship plays as it helps increase the gross capital of any country. When entrepreneurs invest money into their business, they also seek more people, especially those involved in idle savings to invest in their startups as well. A successful investment would mean profit for investors and potentially lead to more investment. Ultimately this would ensure rapid economic growth.
Entrepreneurship also helps in job creation. Naturally, entrepreneurs are job creators as even the smallest startups may experience significant growth leading to expansion and the need for more personnel. Entrepreneurs not only create jobs when they open a business venture but also when they leave the labor market, as it means one less job seeker in the economy.
Entrepreneurship also leads to balanced regional development and an improved standard of living among locals. By establishing businesses and industries in less developed or rural areas, entrepreneurs can significantly reduce the economic disparities between different regions in a country.
When businesses established in these backward areas begin to expand, it may attract significant infrastructural developments like standard roads, water supply, stable power supply, shopping malls, airports, railways, hospitals, and other essential features of a community.
In addition to the infrastructural improvements, entrepreneurs can also help reduce regional disparities by creating jobs for the indigenous people of their business communities, providing them with more money to spend, and improving their standard of living in general. The total spending by employees of new businesses and other establishments in a locality can also improve the output of the community. For example, petty traders and transportation operators would hugely benefit as employees require their daily services.
Another role entrepreneurship plays in developing the economy is increasing competition with existing and other new businesses, leading to lower prices and better product quality.
A new business establishment that produces the same goods and services as an existing company may lower its prices and ensure its product quality is superior to attract customers. This usually leads to stiff competition among businesses as the old business may likely come up with their own strategies to keep their customers.
Consumers are usually the ultimate winners of competitions like this as they are likely to get reductions in prices of better quality goods and services.
Lastly, entrepreneurship plays a key role in the exports of a country. Ambitious entrepreneurs whose businesses have grown significantly may attempt to break into foreign markets. Exports are a crucial component of economic development as it helps a country introduce their products to foreign and larger markets leading to currency exchange. In addition, the government can generate income by imposing export duties on entrepreneurs.
No matter the size, private business startups typically strive to make a profit and ensure the continuity of their business. However, they significantly extend their services to their localities and country generally in the process.
One of the ways entrepreneurship fosters economic development is through capital formation. This is perhaps the most important role entrepreneurship plays as it helps increase the gross capital of any country. When entrepreneurs invest money into their business, they also seek more people, especially those involved in idle savings to invest in their startups as well. A successful investment would mean profit for investors and potentially lead to more investment. Ultimately this would ensure rapid economic growth.
Entrepreneurship also helps in job creation. Naturally, entrepreneurs are job creators as even the smallest startups may experience significant growth leading to expansion and the need for more personnel. Entrepreneurs not only create jobs when they open a business venture but also when they leave the labor market, as it means one less job seeker in the economy.
Entrepreneurship also leads to balanced regional development and an improved standard of living among locals. By establishing businesses and industries in less developed or rural areas, entrepreneurs can significantly reduce the economic disparities between different regions in a country.
When businesses established in these backward areas begin to expand, it may attract significant infrastructural developments like standard roads, water supply, stable power supply, shopping malls, airports, railways, hospitals, and other essential features of a community.
In addition to the infrastructural improvements, entrepreneurs can also help reduce regional disparities by creating jobs for the indigenous people of their business communities, providing them with more money to spend, and improving their standard of living in general. The total spending by employees of new businesses and other establishments in a locality can also improve the output of the community. For example, petty traders and transportation operators would hugely benefit as employees require their daily services.
Another role entrepreneurship plays in developing the economy is increasing competition with existing and other new businesses, leading to lower prices and better product quality.
A new business establishment that produces the same goods and services as an existing company may lower its prices and ensure its product quality is superior to attract customers. This usually leads to stiff competition among businesses as the old business may likely come up with their own strategies to keep their customers.
Consumers are usually the ultimate winners of competitions like this as they are likely to get reductions in prices of better quality goods and services.
Lastly, entrepreneurship plays a key role in the exports of a country. Ambitious entrepreneurs whose businesses have grown significantly may attempt to break into foreign markets. Exports are a crucial component of economic development as it helps a country introduce their products to foreign and larger markets leading to currency exchange. In addition, the government can generate income by imposing export duties on entrepreneurs.
