Question

State two ways through which an entrepreneur contributes towards economic development.

Discuss four ways in which an entrepreneur contributes to Economic Development.

Answer 1

1. Rising Production: Entrepreneurship is the process of maximizing the utilization of the various factors of production, including land, labour, capital, and technology. The production of products and services by entrepreneurs is undertaken to satisfy consumer demand, import substitution, and exports.
2. Employment Generation: In an economy, entrepreneurship generates employment opportunities. When economies are in recession, major business units reduce their workforce by approximately. Job search for positions in modest business units.
3. Innovation: Entrepreneurship gives rise to new technologies and products that replace previously used methods and products. The outcome is an increase in wealth and income.
4. Increasing Competition: Entrepreneurship generates innovation, which fosters the creation of novel products, services, and production methods. This results in an overall increase in competition within the industry, which in turn leads to improved products and reduced prices.

Answer 2

Role of entrepreneurs in economic development:

1. Entrepreneurs mobilise idle savings of the public through the issue of shares and debentures. Investment of these savings in industry results in capital formation.
2. They generate employment opportunities in the country and thus help to reduce unemployment problem in the country.
3. When Entrepreneurs set up industries in backward areas of the countries, they help to remove regional disparities in economic development.
4. Entrepreneurs produce a variety of consumer goods which help to improve the standards of living of the masses.
5. Industrialists when produce goods and services which used to be imported from abroad, help to reduce dependence on foreign countries.