Entrepreneurship And Economic Growth

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Entrepreneurship And Economic Growth

Entrepreneurs play a vital role in economic development. Economic development is essentially a process to increase the real per capita income of the country over a period of time. Entrepreneurs serve as catalysts in the process of industrialization and economic growth. They put to use capital, labour and technology and acts as an economic agent. According to Joseph Schumpeter, the rate of economic progress of a nation depends upon its rate of innovation which in turn depends on the rate of increase in the entrepreneurial talent in the population.

The pace of economic prosperity of any country influenced by the rate of growth in GDP, increasing productivity, growing employment opportunities, increasing economic diversification, optimal use of local resources, continued innovation in techno-managerial practices and, finally, improving international competitiveness. Entrepreneurship is a single factor that contributes significantly to all these. Accordingly, the country’ rate of development is directly dependent on the rate fo emergence and promotion of entrepreneurship.

Developing countries have common history- long years of foreign domination, recent emergence as politically free entities and presently engaged in attaining economic freedom. In this process, most of them face the problem of increasing national production largely though the production of import substitute goods, consumer goods and services, and export of products and services.

The demand for consumer goods and services increases enormously after the initiation of the development process. Such demands are to be met locally by producing more and more consumer goods and services. This is, however, not enough since no country presently can afford to develop in isolation. For rapid and lasting progress, the developing countries have to trade with others for which they need foreign exchange. One of the major sources of earning foreign exchange is production of export goods. For this, a country needs more and more entrepreneurs. The unique contribution of entrepnreurship is that it is a low cost strategy of economic development, job creation and technical innovation. Entrepreneurs bear the costs and risks of launching a new venture, developing a new product, commercializing an invention, adapting a technology and developing a new market.

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