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Importance of Entrepreneurship

Entrepreneurs have always been partners in economic progress. All that the society is presently enjoying as gift of civilization-related to food, fashion cloth, shelter, transport, entertainment etc., are the contribution made by some entrepreneurs, at some point of time, in some part of the world. In our ancient literature, an entrepreneur is referred to as ‘Udyami’ and considered as the ‘starting point’ or ‘spark’ for human civilization. The golden era of Indian History was actually the era of entrepreneurial excellence in every field-be it art, culture, science or wealth.

Entrepreneurship is an essential requirement for the speedy economic growth of any economy as stated below:

1.    Increasing Production. It results in exploitation of economy’s resources such as labour, capital and technology to the fullest extent for increasing national production. Entrepreneurs take up production of goods and services for: (i) meeting the demand of consumers, (ii) import substitution and (iii) exports to other countries as shown in.

Generation of National Income

2.    Challenging Career Option. A person can seek a job with some organization or engage in self-employment activities. Wage employment has a limited scope, but entrepreneurship offers huge career opportunities. A young person who is innovative and creative can start on a small scale and later expand it to create a large enterprise. This will ensure personal growth of the entrepreneur. For example, Dhirubhai Ambani who started on a small scale succeeded in building a huge industrial empire. Besides pursuing entrepreneurship as a career, Ambani created job opportunities for thousands of people.

3.    Decentralization of Economic Power. Most of the entrepreneurs start business enterprises on a small scale and then seek their growth through reinvestment of profits. b doing so, they break the monopoly of existing large enterprises which might be resorting to exploitation of consumers. Rise of small units leads of decentralization of economic power and thus creating a balance in the control of economic resources in the economy.

4.    Increasing Competition in the Market. Entrepreneurs are innovators as they introduce new products and substitutes and new techniques of production. Availability of new products and improved substitutes increases the level of competition in the market resulting in lower prices and the better quality for the consumers. In India, small entrepreneurs also contribute to the foreign exchange earning of the country. The produce goods for exports and thus increase India’s international competitiveness.

5.    Innovation. Entrepreurship results in innovation in a society. The entrepreneur create new technologies and products that displace older technologies and products resulting in higher income and wealth than what is currently available to them. There is evidence to prove that new ventures produce a disproportionately large share of product and process innovations compared with larger and more established firms.

6.    Employment Generation. Entrepreneurship results in creation of new jobs in the economy. Small business units create more jobs than large ones. During economic recession, when large companies are on their way to retrenchment of their workforce, individuals whose jobs are eliminated find employment with small business units. It has been found that small, young, high-technology business units created new jobs at a much faster than did larger, older business firms.

7.    Harnessing Youth Power. Youth power is available is abundance in India. But avenues of wage/salary employment are limited. Due to lack of entrepreneurial opportunities in the society, the available youth is often channeled to self-destruction and non-productive areas. The national, thrust, loses its most valuable resource-the youth power.

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