Entrepreneurs are highly motivated professionals who are courageous enough to start a new venture on their own, intending to achieve desired targets. Whether it is how to schedule smart blinds , or hiring the right people, or maintaining accounts or business marketing and expansion – the sheer range of responsibilities that entrepreneurs tackle seamlessly, makes them the fearless lot.
In today’s world, we can easily say that entrepreneurs are among the principal drivers of the economic growth of a nation.
Now, the question is, how is entrepreneurship important to a country’s economy?
- Generate new employment opportunities
Interestingly, small businesses can be highly impactful in creating more and more new jobs across the world. Statistics show that every year in the USA, jobs created by startup companies constitute 64% of all new jobs created in the country, which amounts to roughly 1.5 million jobs. Starting from entry-level jobs to high-skill ones, entrepreneurs need professionals across varying skillsets, experiences, and industries.
- Capital creation
Entrepreneurs can activate public savings by issuing industrial securities. The public can invest in industries or sectors of their choice thereby leading to the optimal use of national resources. This in turn boosts the capital creation of the nation and contributes to its economic development.
- Boosts per capita income
Per capita income is the standard for calculating a country’s economic development. This per capita income rises when the national resources are efficiently utilized to the maximum. Entrepreneurs help in locating idle resources like labor, land, savings, and creating opportunities to convert them into goods and services which ultimately raise the national income.
- Community progress
Entrepreneurship has the potential to create job opportunities and wealth not only for the entrepreneurs but also for all other business ventures associated either directly or indirectly. It nurtures other business ventures and also helps in generating funds for community projects, local charitable institutions, community health, education, and various other good causes for society. This ensures the collective betterment of the community.
- Creation and distribution of wealth
Entrepreneurs are actually wealth creators. When they launch their business venture, they invest their own resources and also capitalize on debts and equities from lenders and other investors. And as their business expands, they distribute wealth by issuing various deals for the public to consume and grow their wealth.
- Raises living standards
The standard of living for a particular household is calculated on the basis of consumption of services and goods over a specific period. This is majorly dependent on the presence of diversified services and products, which are a result of entrepreneurial ventures. Startup companies help their employees and associated individuals to increase their earnings, which boosts the standard of living.
- Facilitate research and development
Entrepreneurship and innovation go hand in hand; it is one of the founding layers of entrepreneurship. You will find many entrepreneurs who take great interest in innovations and have funded various research and development initiatives for the same. R&D projects, when properly financed, can lead to fruitful innovations which can give back to society and boost the economic development of a country.
- Capital market growth
It is impossible to launch a brand new entrepreneurial venture without sufficient finances. Very often, while launching a company, the general public is encouraged to invest in it by buying shares issued by the company. So, entrepreneurs seek monetary investments from financial bodies and the public; and shares and debentures are traded, which results in the expansion of the capital market.
- Development of national infrastructure
A nation’s infrastructure directly influences the development of its economy. Entrepreneurs seek to unearth the scope of development and transform underutilized locations, areas in the countryside by developing workshops, factories and generating more jobs in such areas. This leads to the proper utilization and development of national infrastructures like land and human resources.
- Economic integration and linkages
For the flawless functioning of a business venture, it must collaborate with other businesses across industry verticals. This means entrepreneurs have to reach out to other businessmen and entrepreneurs irrespective of location and have to abide by standardized legal regulations and economic policies.
- Attract foreign investments
In the course of their business expansion, entrepreneurs attract not only domestic funding but also open up channels of financing by foreign investors. This increases the inflow of foreign capital and in turn, boosts the economy of the nation.
- Boost export
The influx of foreign capital via the export of goods and services is essential for the economic growth of any country. And entrepreneurs are actively engaged in the global export of their services and products. This active trading with global companies also allows the flow of foreign funds into the nation, which boosts its economy.
- Improve Human Development Index
The development of a country’s human resources is the key to the holistic development of the national economy. Entrepreneurship allows the countrymen to acquire knowledge, learn new things and adopt newer technologies, i.e. it influences the overall advancement of human beings and positively impacts the nation’s Human Development Index.
- Promotes trade development
Entrepreneurship plays a direct role in promoting trade relations in terms of domestic as well as global landscape. As more and more financial institutions collaborate with entrepreneurs, the exchange of investment money via credits, cash credits, overdrafts, and various kinds of loans increases. This kind of investment funds result in the promotion of trade relations across the country and across borders.
- Boost expansion of existing organizations
Outsourcing work to smaller companies and startups is not uncommon today. Entrepreneurship encourages existing giant organizations to collaborate with them when it comes to innovations and development. So in other words, the existing organizations get a chance to expand their operations by working together with entrepreneurs. This is clearly a win-win situation for both parties, not to mention the immense economic boost it offers to the national economy.
Entrepreneurship comes with infinite potentials and can propel a nation’s development if nurtured the right way. For that, the government has to play an active role in establishing the right balance between entrepreneurs and policy-makers.