Question

Explain the role of an entrepreneur in the economic development of the country.

Explain any three roles of an entrepreneur in economic development of the country.

Answer 1

Role of an entrepreneur in the economic development of the country:

• Innovative power towards industrialisation: When entrepreneurs introduce cost reducing or demand-creating innovations in various industries, industrial production becomes a factor. The country will become self-sufficient in the production of various types of industrial goods of high quality to cater to the changing needs of both domestic and foreign markets.
• Generation of higher employment: Different types of innovation results in higher profits for entrepreneurs. They use the earned income for productive purposes or in new ventures. This leads to increase in investment which generates employment opportunities in an economy.
• Ability to predict future market and business condition: Entrepreneurs make a complete analysis of market conditions at regular intervals. This enables a firm to take precautionary actions to overcome uncertain business conditions such as inflationary and deflationary conditions. So, the economy will be balanced at times of unfavourable business conditions with the help of entrepreneurs.
• Capital formation: Through the issuance of industrial securities, entrepreneurs mobilise the public's idle savings. Public savings invested in industry result in more productive use of national resources. Capital formation leads to rapid economic expansion. As a result, an entrepreneur contributes to the production of "wealth."
• Generation of employment:  Entrepreneurs create jobs both directly and indirectly. Directly, self-employment as an entrepreneur is the finest path to a self-sufficient and honourable life. Indirectly, they provide jobs to millions of people by establishing large and small-scale business units. Thus, entrepreneurship contributes to the country's unemployment problem.
• Economic independence: Entrepreneurship is critical for national self-sufficiency. Industrialists contribute to the production of local equivalents for imported goods, minimising reliance on foreign countries. Businessmen also export goods and services on a huge scale, earning the country's scarce foreign exchange. Such import substitution and export promotion contribute to the country's economic independence.