Top 5 Ways Entrepreneurs Contribute To The Economy
No matter how trendy the concept is in , you can’t ignore the fact that entrepreneurship plays a very important role in the economic development of a country. Entrepreneurs are great assets to our society. They should be given more resources to support their missions and more opportunities to tackle important problems we face as a nation. Oct 08, · Role of Entrepreneurship in Economic Development is that it helps in the production of Qualitative Goods- Entrepreneurial activities contribute much to the development of an economy. The increased Entrepreneurial undertakings ensure newer and qualitative products to the consumers, the Entrepreneurs in order to face the competition of the market.
There are mainly two types of determinants factors which influence the economic development of a country. The stock of capital and the rate of capital accumulation in most cases settle what is molex power connector question whether at a juven point of time a country will grow or not.
There are a few other economic factors which also have some bearing on development but their importance is hardly comparable to that of capital formation. The surplus of foodgrains output available to support urban population, foreign trade conditions and the nature of economic system are some such factors whose role in economic development has to be analyzed:.
Image Courtesy : upload. The strategic role of capital in raising the level of production what to say to make him love you traditionally been acknowledged in economics. It is now universally admitted that a country which wants to accelerate the pace of growth, has m choice but to save a high ratio-of its income, with the objective of raising the level of investment. Great reliance on foreign aid is highly risky, and thus has to be avoided.
Economists rightly assert that lack of capital is the principal obstacle to growth and no developmental plan will succeed unless adequate supply of capital is forthcoming. Whatever be the economic system, a country cannot hope to achieve economic progress unless a certain minimum rate of capital accumulation is realized.
However, if some country wishes to make spectacular strides, it will have to raise its rate of capital formation still higher. The principal factor affecting the development of an economy is the natural resources. Among the natural resources, the land area and the quality of the soil, forest wealth, good river system, minerals and oil-resources, good and bracing climate, etc. For economic growth, the existence of natural resources in abundance is essential.
A country deficient in natural resources may not be in a position to develop rapidly. In fact, natural resources are a necessary condition for economic growth but not a sufficient one.
Japan and India are the two contradictory examples. In less developed countries, natural resources are unutilized, under-utilized or mis- utilized. This is one of the reasons of their backwardness. This is due to economic backwardness and lack of technological factors.
Japan is one such country which is deficient in natural resources but it is one of the advanced countries of the world because it has been able to discover new use for limited resources. Increase in agricultural production accompanied by a rise in productivity is important from the point of view of the development of a country. But what is more important is that the marketable surplus of agriculture increases. The importance of the marketable surplus in a developing economy emanates from the fact that the urban industrial population subsists on it.
With the development of an economy, the ratio how to talk like a mobster the urban population increases and increasing demands are made on agriculture for foodgrains. These demands must be met adequately; otherwise the consequent scarcity of food in urban areas will arrest growth. In case a country fails to produce a sufficient marketable surplus, it will be left with no choice except to import foodgrains which may cause a balance of payments problem.
UntilIndia was faced with this problem precisely. In most of the years during the earlier planning period, market arrivals of foodgrains were not adequate to support the urban population. If some country wants to step-up the tempo of industrialization, it must not allow its agriculture to lag behind.
The supply of the farm products particularly foodgrains, must increase, as the setting-up of industries in cities attracts a steady flow of population from the countryside. The classical how to file 2010 taxes online for free of trade has been used by economists for a long time to argue that trade between nations is always beneficial to them.
In the existing context, the theory suggests that the presently less developed countries should specialize in production of primary products as they have comparative cost advantage in their production. The developed countries, on the contrary, have a comparative cost advantage in manufactures including machines and equipment and should accordingly specialize in them. In the recent years, a powerful school has emerged under the leadership of Raul Prebisch which questions the merits of unrestricted trade between developed and under-developed countries on both theoretical and empirical grounds.
Foreign trade has proved to be beneficial to countries which have been able to set-up industries in a relatively short period. These countries sooner or later captured international markets for their industrial products. What does lcd and led stand for countries like India the macro-economic interconnections are crucial and the solutions of the problems of these economies cannot be found merely through the foreign trade sector or simple recipes associated with it.
The economic system and the historical setting of a country also decide the development prospects to a great extent. There was a time when a country could have a laissez faire economy and yet face no difficulty in making economic progress.
The Third World countries of the present times will have to find their own path of development. They cannot hope to make much progress by adopting a laissez faire economy. Further, these countries cannot raise necessary resources required for development either through colonial exploitation or by foreign trade. They now have only two choices before them:. The latest experiments in economic planning in China have shown impressive results. Therefore, from the failure of economic planning in the former Soviet Union and the erstwhile East European socialist countries it would be wrong to conclude that a planned economy has built-in inefficiencies which are bound to arrest economic growth.
From the available historical evidence, it is now obvious that non- economic factors are as much important in development as economic factors. Here we attempt to explain how they exercise influence on the process of economic development:. Human resources are an important factor in economic development. Man provides labour power for production and if in a country labour is efficient and skilled, its capacity to contribute to growth will decidedly be high.
But in case human resources remain either unutilized or the manpower management remains defective, the same people who could have made a positive contribution to growth activity prove to be a burden on the economy.
It has never been, doubted that the level of technical know-how has a direct bearing on the pace of development. As the scientific and technological knowledge advances, man discovers more and more sophisticated techniques of production which steadily raise the productivity levels.
Schumpeter was deeply impressed by the innovations done by the entrepreneurs, and he attributed much of the capitalist development to this role of the entrepreneurial class.
Since technology has now become highly sophisticated, still greater attention has to be given to Research and Development for further advancement. Under assumptions of a linear homogeneous production function and a neutral technical change which does not affect the rate of substitution between capital and labour, Robert M. Solow how an entrepreneur can contribute to the country economic development observed that the contribution of education to the increase in output per man hour in the United States between how to make a bridal veil for bachelorette party was more than that of any other factor.
We all know that the under-development of India, Pakistan, Bangladesh, Sri Lanka, Malaysia, Kenya and a few other countries, which were in the past British colonies, was linked with the development of England. England recklessly exploited them and appropriated a large portion of their economic surplus. Mass participation in development programs is a pre-condition for accelerating the growth process. However, people show interest in the development activity only when they feel that the fruits of growth will be fairly distributed.
Under the circumstances, it is futile to hope that masses will participate in the development projects undertaken by the State. Growth of monopolies in industries and concentration of economic power in the modern sector is now an undisputed fact. Furthermore, the new agricultural strategy has given rise to a class of rich peasantry creating widespread disparities in the countryside.
Corruption is rampant in developing countries at various levels and it operates as a negative factor in their growth process. Until and unless these countries root-out corruption in their administrative system, it is most natural that the capitalists, traders and other powerful economic classes will continue to exploit national resources in their personal interests.
The regulatory system is also often misused and the licenses are not always granted on merit. The art of tax evasion has been perfected in the less developed countries by certain sections of the society what does rim offset mean often taxes are evaded with the connivance of the government officials.
Development activity is not a mechanical process. If in some country level of consciousness is low and the general mass of people has accepted poverty as its fate, then there will be little hope for development.
According to Richard T. Ultimately, it is a human enterprise. Economic Development. You must be logged in to post a comment. Leave a Reply Click here to cancel reply.
2. Providing employment opportunities.
The infrastructure development of any country determines the economic development of a country, Entrepreneurs by establishing their enterprises in rural and backward areas influence the government to develop the infrastructure of those areas. Development of Trader. Mar 07, · In a country, there will be tons of entrepreneurs who are running a business every day. Being an entrepreneur doesn’t as simple as you thought. Don’t you know that the entrepreneurship is giving a big contribution to the economic development of its country? The Influences for Economic Development For you who are running a business, [ ]. Mar 27, · Entrepreneurship plays a vital role in the development of a country’s economy as this is the key contributor to innovativeness, product improvement, reduction of unemployment and poverty.. Entrepreneurship, which is basically the practice of starting a business in order to earn a profit on newfound opportunities, can go a long way to stabilize the economy of a nation as well as generate.
Role of Entrepreneurs in economic development of a country are discussed under the following heading. Role of Entrepreneurs in Economic Development of Country. Entrepreneurs employ labour for managing their business activities and provides employment opportunities to a large number of people. They remove unemployment problem. Government promotes decentralized development of industries as most of the incentives are granted for establishing industries in backward and rural areas.
Thus, the entrepreneurs to avail the benefits establish industries in backward and rural areas. They remove regional disparities and bring balanced regional development. They also help to reduce the problems of congestion, slums, sanitation and pollution in cities by providing employment and income to people living in rural areas.
They help in improving the standard of living of the people residing in suburban and rural areas. Entrepreneurs help to mobilize and utilize local resources like small savings and talents of relatives and friends, which might otherwise remain idle and unutilized. Thus they help in effective utilization of resources. Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by providing high output capital ratio as well as high employment capital ratio.
Entrepreneurs produce a wide range of products required by consumers. They meet the demand of the consumers without creating a shortage for goods. Entrepreneurs help in the development of the society by providing employment to people and paves for independent living They encourage democracy and self-governance. They are adept in distributing national income in more efficient and equitable manner among the various participants of the society. Entrepreneurs help to increase the per capita income of the country in various ways and facilitate development of backward areas and weaker sections of the society.
A country can attain economic development only when there is more amount of investment and production. Entrepreneurs help in channelizing their savings and savings of the public to productive resources by establishing enterprises.
They promote capital formation by channelizing the savings of public to productive resources. Entrepreneurs raises money for running their business through shares and debentures.
Trading of shares and debentures by the public with the help of financial services sector leads to capital market growth. The infrastructure development of any country determines the economic development of a country, Entrepreneurs by establishing their enterprises in rural and backward areas influence the government to develop the infrastructure of those areas. Entrepreneurs play an important role in the promotion of domestic trade and foreign trade.
They avail assistance from various financial institutions in the form of cash credit, trade credit, overdraft, short term loans, secured loans and unsecured loans and lead to the development of the trade in the country.
Entrepreneur reduces the concentration of power in a few hands by creating employment opportunities and through equitable distribution of income. Entrepreneurs promote economic integration in the country by adopting certain economic policies and laws framed by the government. They help in removing the disparity between the rich and the poor by adopting the rules and regulation framed by the government for the effective functioning of business in the country. Entrepreneurs help to attract funds from individuals and institutions residing in foreign countries for their businesses.
Employment opportunities 2. Balanced Regional Development 3. Mobilization Of Local Resources 4. Optimization Of Capital 5.
Promotion of Exports 6. Consumer Demands 7. Social Advantage 8. Increase per capita income 9. Capital formation Growth of capital market Growth of infrastructure Development of Trader Economic Integration Inflow of Foreign Capital.
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