Role of Entrepreneurship in Socio-Economic Development

by Tulip Sharma 

“Someone is sitting in the shade today because someone planted a tree a long time ago”.

—Warren Buffett

 Entrepreneurship is one of the most challenging fields around. It is not a customary job, rather a responsibility bestowed upon oneself defined by the ability to turn nays into yays. The word “entrepreneur” traces its origin to the French verb entreprendre meaning “to undertake”. An entrepreneur is someone who constantly looks for commercial opportunities to gain profits. Making way through risks by employing innovative business ideas is what defines a true entrepreneur. An entrepreneur is a crystallization of fresh ideas, plans, goods, services, and business acumen. Therefore, his actions do not only have far-reaching consequences for his firm but also for the socio-economic setup of a nation. Entrepreneurs are considered to be national assets with unlimited potential who can act as change-makers in society. Besides land, labour, and capital, entrepreneurship is a prerequisite for production activities. It acts as a driving force to kindle new debate and discourse relating to innovation, encourages public participation, and fosters social prosperity. Hence, it can be said that entrepreneurship is a concept that relies upon mind and manpower.

Entrepreneurship gives a fillip to the growth of an economy by generating fortune and promotes social development. Let’s delve closely into how entrepreneurship plays a role in the socio-economic development of a nation:

•Generates employment: By default, entrepreneurs are creators of jobs and not seekers. They have an edge over others in the sense that they are independent in their outlook and open to all challenges. They create jobs not just for themselves but go on to hire more people as their businesses progress. Entrepreneurship offers wide-ranging employment like entry-level jobs important for gaining experience and provides training to unskilled employees.

•Establishes a model of wealth-sharing: Any business is driven successfully by means of resources and investments. When sponsors, lenders and the general public pool in their resources with an aim to invest in a business, not only they benefit from it but this process also leads to the establishment of a chain of support and results in the creation of wealth. The rate of capital formation also increases which is an important impetus for the growth of an economy. Entrepreneurs also assist in financing government projects which leads to increased revenue and contributes to the GDP.

•Leads to boost in exports: Once an entrepreneur establishes his business, he looks out for future prospects of profit and aims to further extend his business to new frontiers. He aims to get access to new foreign markets which leads to the inflow of currency and modern technologies. By investing and mobilizing their capital and making informed choices, they make productive use of the available resources which leads to economic prosperity and contributes to the country’s GDP.

•Promotes research and development: No business can fully prosper without a proper foundation based on research. Entrepreneurship demands doing the right thing in the right place at the right time. An entrepreneur is always ought to keep up with the ever-evolving demands of society. Every product and service has to be designed in a personalized manner keeping in mind the consumer preferences. It involves identifying the existing business opportunities and if not create new ones at par with the prevailing market scenario. Better research and development demands advancement in education and technology resulting in a productive informed and healthy community life.

•Promotes better living standards: The new innovations and discoveries, start-ups, and business models that we come across on a daily basis possess an important element in them which is entrepreneurship. Be it a high-tech device, a luxury car, or a fashion brand in vogue, all of them offer a personalized user experience thereby impacting the living standard of the end-users. This consumer experience is fruitful in the long run as it ultimately scales up the sale of goods and services leading to profits for the firm.

For instance, a handful of information technology companies built up the IT industry during the 1990s. The industry registered a quick growth and associated sectors benefitted from it like the hardware providers, call-center and the telecom operators, etc. The IT industry met the needs of crores of Indians and raised their living standard by keeping them informed at the tip of their fingers.

•Leads to balanced regional development: Entrepreneurship seeks to explore the unknown and create opportunities out of it. It invests in areas that remain dormant and least developed. When a business gets established in a region deprived of development, new infrastructure is roped in resulting in the development of roads, rails, ports, aviation, etc. Basic amenities like water, electricity, schools, hospitals are made available to the local populace. Various public and private services also come to the rescue of the people. The government also acknowledges budding entrepreneurs and does its part by developing areas as Special Economic Zones (SEZs) to attract higher FDI inflows. They also offer subsidies, concessions, and incentives to the blooming businesses from time to time. This altogether bridges the gap between the developed and underdeveloped regions to a great extent.

A good example to illustrate this is the philanthropic work done by Azim Premji, the chairman of Wipro Ltd. whose foundation works with more than 350,000 schools across eight states in India to uplift the poor children by providing them education. Leading by example, entrepreneurs can inspire others to take up initiatives to drive away regional disparities.

Entrepreneurship is nothing short of a rollercoaster ride! Amid unlimited possibilities and challenges, entrepreneurs play a pivotal role in a nation’s development. Today the developed countries are leading players in the world economy primarily because of their entrepreneurs who possess a futuristic outlook and creative thinking. This self-motivating field is very dignified given the fact that entrepreneurs are catalysts of social change. Marked by versatility, passion, and diligence, entrepreneurs stand out as inspiring professionals. As rightly put by Niklas Zennstrom, “If you want to be an entrepreneur, it’s not a job, it’s a lifestyle. It defines you”.

About the Author:

Tulip Sharma is a student who researches and writes copiously on law, politics, animal rights, economy & management. Currently, she is pursuing B.A.L.L.B (Hons) from Amity University Chhattisgarh. 

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