Importance of Entrepreneurship

Entrepreneurship is a must for planned and rapid economic development. In developing countries, entrepreneurship is an important base of prosperity whereas in developed countries it is a technique of creative thinking, social innovation and enterprise society.

Some of the importance of entrepreneurship are as follows:

Entrepreneurship helps in reducing socio-economic problems.
Entrepreneurship helps in incrementing employment opportunities.
Entrepreneurship helps in capital formation.
Entrepreneurship helps in harnessing local resources.
Entrepreneurship helps in preventing industrial slums.
Entrepreneurship helps in defusing social tension.
Entrepreneurship helps in eliminating poverty and unemployment.

Importance of Entrepreneurship

Following points are in favour to importance of entrepreneurship these are:

1. Social Responsibility:

Traditional business has been lost in the innovation era due to technological advancement. According to Schumpeter “It is creative destruction” but in this situation social threat is created in view of employment in society, economic stability and social system and state responsibility.

2. Social Satisfaction:

Joint sector and privatization tendency are giving a positive attitude to society. Govt. is delegating the power of conduction to private entrepreneurs through implementing L.P.G. policy and giving stress to the joint sector concept. So, by the development of entrepreneurship and creation of new values, functions and utilities an entrepreneur can increase social satisfaction among society.

3. Establishment of Viable Units:

Commercial units can make beneficial, viable and skillful units through entrepreneurship development.

Possibility of success of commercial units is increased by entrepreneurs because they are furnished with trained skill and modern equipment. An entrepreneur is the one who is capable to use and give a modern and utilize shape to unused resources and make perpetual life to business units.

4. Development of Entrepreneurial Tendencies:

Entrepreneurship develops the independent self-dependent desire to achieve a high achievement tendency among peoples. Creative psycho-tendency can be developed by entrepreneurship. Thus, it is a system of spreading or communicating awareness and activeness towards entrepreneurship among society.

What is the Importance of Entrepreneurship

1. Balance Growth:

Entrepreneurship may be helpful in removing developmental gaps and economic backwardness in different areas. Entrepreneurs can reduce economic inequality by taking the risk of establishing new units in these areas.

2. Optimum Utilization of Resources:

The optimum utilization of natural and human resources such as raw material, manpower, natural wealth, is possible by entrepreneurship development. An entrepreneur makes a remarkable contribution in increasing national productivity by using their managerial skill. Entrepreneurship mobilizes the economic resources from low productivity areas to high productivity areas.

3. Reduction in Socio-Economic Problems:

Entrepreneurship development helps in promoting industries, creating employment, income and saving and increasing capital formation rate. All the earlier facts help in eradicating problems such as poverty, low cost of living standard, social crime, dowry, violence, child labour exploitation etc.

4. Entrepreneurial initiative:

Helpful in establishing a self-reliant society.
Tools of social changes.
Promotion to innovation.
Rapid economic growth.

Entrepreneurial initiatives lead to economic growth, open up fresh avenues, create jobs, increase demand and supply of products and services and help the economy in moving closer to long-term goals. It is in the interest of all the governments to frame supportive policies and provide a conducive environment to promote entrepreneurship and reap the benefits of its activity.

5 Importance of Entrepreneurship

1. Increased Profits:

Profits can be increased in any enterprise either, by increasing the sales revenue or reducing cost. To increase the sales revenue is beyond the control of an enterprise. Entrepreneurship by reducing costs increases its profit’s and provides opportunities for future growth and development.

2. Change of Growth:

An enterprise operates in a changing environment. Entrepreneur moulds the enterprise in such a changing environment. It moulds not only the enterprise but also alters the environment itself to ensure the success of the enterprise. In order to meet the challenge of automation and the complexities of advanced technology also there is a need for the development of entrepreneurship.

3. Increment in Employment Opportunities:

An entrepreneur develops new industries, expands and develops existing units and generates employment opportunities for people. In the present lots of new sectors have been opened such as computers, bio-engineering, telecommunication etc. According to Ribson’s “In developing countries entrepreneurs are the provider of employment opportunities to people.”

4. Helpful in Capital Formation:

Entrepreneurship is a factor which is helpful to invest saving in a productive function. By increasing commercial activities, entrepreneurs help in increasing the rate of capital formation.

5. Smooth Running of Enterprise:

Entrepreneurship ensures efficient and smooth running of enterprise through better planning, sound organisation, effective control and various tools of entrepreneurship.

Explain the Importance of Entrepreneurship

The following points explains the importance of entrepreneurship:

1. Achievement of Entrepreneurial Goals:

It is the entrepreneurship which makes the entrepreneurs realise the objectives of the enterprise and directs their efforts towards the achievement of these objectives. It brings the human and material resources together to mobilise the people for the achievement of the goals of the enterprise.

2. Optimum Use of Resources:

No entrepreneurial activity can be undertaken without the factors production i.e., land labour, capital and entrepreneurship. The three factors may prove ineffective in the absence of the fourth, entrepreneurship. The entrepreneurship which makes optimum utilisation of resources possible.

3. Minimisation of Cost:

In the present days of increasing competition, only those enterprises can survive which can produce quality goods at the lowest of costs. Through better planning, sound organisation and effective control, entrepreneurs enable enterprises to reduce costs and enable an enterprise to face cut throat competition.

4. Social Benefits:

Entrepreneurship is beneficial not only to the business enterprises but to the society as a whole. It raises the standard of living of the people by providing good quality products and services at the lowest possible cost. It also makes the optimum use of scarce resources and promotes peace and prosperity in the society.

5. Employment Opportunities:

Entrepreneurship and its activities provide maximum employment potential. Large number of persons are employed in entrepreneurial activities in the country. The growth of entrepreneurial activities brings more and more employment opportunities.

6. Life-Line of Nation:

No country can progress without the development of entrepreneurship. Every country is trying to promote its trade so that it is able to share the benefits of development. Therefore, entrepreneurship is the yardstick to measure the level of development of a country.

Importance of Entrepreneurship Development

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Entrepreneurship development is becoming increasingly important and popular with the hope that it will help in solving the following issues:

1. Eliminating Poverty and Unemployment:

India is an underdeveloped though a developing country. Increasing population is causing a large increase in unemployment of the people. The increasing unemployment is a serious and grave problem, not of India alone but also most of the developing countries of the world. But entrepreneurship development can help in solving the severity of the problem because it helps the unemployed people to opt for self-employment and entrepreneurial careers.

Various schemes to reduce unemployment and under-employment such as National Rural Employment Programme (NREP), Integrated Rural Development Programme (IRDP), Jawaharlal (Nehru) Rozgar Yojana (JRY), Rural Landless Employment Guarantee Programme (RLEGP) etc. have been in operation in India. All these schemes aim at eliminating poverty and unemployment in the country.

2. Balanced Regional Development:

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Entrepreneurial development aims at developing particularly the small scale and medium scale industries in backward and rural areas by providing all types of assistance, financial, technical, managerial, marketing and infrastructure facilities in order to achieve balanced regional development and at the same, to reduce the concentration of economic power. Entrepreneurship development will lead to the development of small scale industries all over the country leading to the balanced regional industrial development.

3. Harnessing Local Resources:

Entrepreneurship development can help in harnessing the locally available resources as they are being used by the entrepreneurs for their industrial units. In the absence of such industrial development, these resources, available in abundance locally, would have remained unutilised and unexploited.

4. Preventing Industrial Slums:

Large industries, which have developed in big cities, have led to the formation of slum areas in these cities as they are highly congested. Decentralisation of industries and their disbursement help in the removal of industrial slums because the entrepreneurs would be provided all types of assistance to set up their industrial units in backward and rural areas which have remained industrially backward. This will help in controlling the industrial slums and thereby reduce the environmental pollution, traffic congestion, over-crowding, housing problem etc. in cities.

5. Defusal Social Tension:

Educated young persons, particularly after completing their education, are frustrated if they do not get employment. Their talent will be wasted if they remain unemployed. If their talent is to be utilised, they must be given an opportunity of self-employment, which will help the country in defusing social tension and unrest among the young people. This is possible only through entrepreneurial development.

Importance of Rural Entrepreneurship

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Rural entrepreneurship is of great importance for a country which has a huge rural population.

The importance of rural entrepreneurship is manifested in the following ways:

1. Augments employment opportunities – Rural entrepreneurship is basically labour intensive. It provides employment opportunities for the rural mass. Rural entrepreneurship has the potential of abating the problem of unemployment and underemployment prevalent in rural regions.

2. Positive check on migration of rural population to urban areas – Rural population including the unskilled workers move out to the urban areas in search of jobs and lead a very miserable life in urban areas. Rural entrepreneurship has the capacity to reduce the gap existing between urban areas and the rural areas. Rural entrepreneurship can generate employment opportunities and contribute in developing the infrastructure and other amenities in the rural areas.

3. Rural entrepreneurship can significantly contribute towards promotion of balanced regional development.

4. Rural entrepreneurship has the potential of protecting and promoting traditional artistic activities, art, craft and handicraft of the rural areas.

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5. The social problems like poverty, inequality, caste distinctions can be reduced by rural entrepreneurship.

6. Entrepreneurship in the rural areas can be taken up as a career by the youths. The rural youth can be encouraged and awakened.

7. Rural entrepreneurship can improve the standard of living in rural areas. Their increasing opportunities for growth and prosperity can uplift the rural communities.

8. The local resources available in the rural areas are best known to the local rural population. Rural entrepreneurship can ensure the most efficient and effective use of limited resources by the entrepreneurs that can contribute to the overall economic development of rural areas.

9. Rural entrepreneurship can play a significant role in increasing the foreign exchange earnings of the country if their products are recognized and demanded abroad.

10. Rural entrepreneurship can generate more employment, output, and wealth from the rural areas and thus contribute to the growth and improvement of per capita income of rural people.