The role of entrepreneurs in economic development

ENTREPRENEURS CONTRIBUTE to the economic development in several ways. Here are a few: 1. Wealth creation and sharing: By establishing the business entity, entrepreneurs invest their own resources and attract capital (in the form of debt, equity, etc) from investors, lenders and the public. This mobilises public wealth and allows people to benefit from the success of entrepreneurs and growing businesses. This kind of pooled capital that results in wealth creation and distribution is one of the basic imperatives and goals of economic development.

2. Create jobs: Entrepreneurs are by nature and definition job creators, as opposed to jobseekers. The simple translation is that when you become an entrepreneur, there is one less jobseeker in the economy, and then you provide employment for multiple other jobseekers. This kind of job creation by new and existing businesses is again is one of the basic goals of economic development.

3. Balanced regional development: Entrepreneurs setting up new businesses and industrial units help with regional development by locating in less developed and backward areas. The growth of industries and business in these areas leads to infrastructure improvements like better roads and stable electricity and water supply, schools, hospitals, shopping malls and other public and private services that would not otherwise be available.

Every new business that locates in a less developed area will create both direct and indirect jobs, helping lift regional economies in many different ways. The combined spending by all the new employees of the new businesses and the supporting jobs in other businesses adds to the local and regional economic output. Both central and state governments promote this kind of regional development by providing registered micro, small and medium enterprise businesses various benefits and concessions.

4. Standard of living: Increase in the standard of living of people in a community is yet another key goal of economic development. Entrepreneurs again play a key role in increasing the standard of living in a community. They do this not just by creating jobs, but also by developing and adopting innovations that lead to improvements in the quality of life of their employees, customers, and other stakeholders in the community. For example, automation that reduces production costs and enables faster production will make a business unit more productive, while also providing its customers with the same goods at lower prices.

5. Exports: Any growing business will eventually want to get started with exports to expand their business to foreign markets. This is an important ingredient of economic development since it provides access to bigger markets, and leads to currency inflows and access to the latest cutting-edge technologies and processes being used in more developed foreign markets. Another key benefit is that this expansion that leads to more stable business revenue during economic downturns in the local economy.