Importance Of Entrepreneurs Essay

Entrepreneurs are frequently thought of as national assets to be cultivated, motivated and remunerated to the greatest possible extent. Entrepreneurs can change the way we live and work. If successful, their innovations may improve our standard of living, and in addition to creating wealth with their entrepreneurial ventures, they also create jobs and the conditions for a prosperous society.

Entrepreneurs Create New Businesses

Trailblazing offerings by entrepreneurs, in the form of new goods and services, can produce a cascading effect by stimulating related businesses or sectors supporting the new venture, furthering economic development.

For example, a few IT companies founded the Indian IT industry in the 1990s as a backend programmers' hub. Soon the industry gathered pace in its own programmers’ domain. But more importantly, millions from other sectors benefited from it. (For more, see: Top Indian Billionaires And How They Made Their Money.)

Businesses in associated industries, like call center operations, network maintenance companies and hardware providers, flourished. Education and training institutes nurtured a new class of IT workers who were offered better, high-paying jobs. Infrastructure development organizations and even real estate companies capitalized on this growth as workers migrated to employment hubs seeking better lives.

Similarly, future development efforts in underdeveloped countries will require robust logistics support, capital investment from buildings to paper clips, and a qualified workforce. From the highly qualified programmer to the construction worker, the entrepreneur benefits a large part of the economy.

Entrepreneurs Add to National Income

Entrepreneurial ventures generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit the glass ceiling in terms of income. New and improved products, services or technology from entrepreneurs enable new markets to be developed and new wealth to be created. 

Additionally, increased employment and higher earnings contribute to better national income in the form of higher tax revenue and higher government spending. This revenue can be used by the government to invest in other, struggling sectors and human capital.

Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain workers. (For more, see: Starting A Small Business In Tough Economic Times.)

Entrepreneurs Create Social Change

Through their unique offerings of new goods and services, entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies. This results in an improved quality of life, improved morale and greater economic freedom.

For example, the water supply in a water-scarce region will, at times, force people to stop working to collect water. This will impact their business, productivity and income. Imagine an innovative, automatic, low-cost, flow-based pump that can fill people's water containers automatically. This type of innovation ensures people are able to focus on their jobs without worrying about a basic necessity like water. More time to devote to work translates to economic growth.

For a more contemporary example, smartphones and apps have revolutionized work and play across the globe. Smartphones are not exclusive to wealthy countries or people either. As the growth of China's smartphone market and its smartphone industry shows, technological entrepreneurship will have profound, long-lasting impacts on the entire human race.

Moreover, the globalization of technology means entrepreneurs in lesser-developed countries have access to the same tools as their counterparts in richer countries. They also have the advantage of a lower cost of living, so a young entrepreneur from an underdeveloped country can take on the might of a multi-million-dollar existing product from a developed country.

Community Development

Entrepreneurs regularly nurture ventures by other like-minded individuals. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures. Some famous entrepreneurs, like Bill Gates, have used their money to finance good causes, from education to public health. The qualities that make one an entrepreneur are the same qualities that motivate entrepreneurs to pay it forward. (For more, see: Millionaires Who Gave it All Away.)

The Other Side of Entrepreneurs

Are there any drawbacks to cultivating entrepreneurs and entrepreneurship? Is there a limit to the number of entrepreneurs a society can hold?

Italy may provide an example of a place where high levels of self-employment have proved to be inefficient for economic development. Research reveals that Italy has in the past experienced large negative impacts on the growth of its economy because of self-employment. There may be truth in the old saying, "too many chefs and not enough cooks spoil the soup." 

The Role of Government

Regulation plays a crucial role in nurturing entrepreneurship and requires a fine balancing act on the part of the regulating authority. Unregulated entrepreneurship may lead to unwanted social outcomes including unfair market practices, pervasive corruption, financial crisis and even criminal activity.

Findings from United Nations University also indicate the possible implications of “over-nurturing" entrepreneurship. European economist Wim Naudé argues that “while entrepreneurship may raise economic growth and material welfare, it may not always result in improvements in non-material welfare (or happiness). Promotion of happiness is increasingly seen as an essential goal.”  

Paradoxically, a significantly high number of entrepreneurs may lead to fierce competition and loss of career choices for individuals. With too many entrepreneurs, levels of aspirations usually rise. Owning to the variability of success in entrepreneurial ventures, the scenario of having too many entrepreneurs may also lead to income inequality, making citizens more, not less, unhappy.

The Bottom Line

The interesting interaction of entrepreneurship and economic development holds important inferences for policy makers, development institutes, business owners, change agents and charitable donors. If we understand the benefits and drawbacks, a balanced approach to nurturing entrepreneurship can result in a positive impact on economy and society. 

Enterprise is defined as the act of creating, innovating and setting up a business, taking financial risks expecting profits. The enterprise in company form offers a product, a process or service for sale or hires to professionals or individuals, contributing to a community’s overall economic development.

Entrepreneurship is known for the high risks involved in launching a startup. The fact is people often suffer failures along the their path to success, and some businesses have to close, due to a lack of fund, sales decisions, or a lack of demand in the market. That’s why entrepreneurship is mostly viewed as something risky and out of the comfort zone. Enterprise takes courage to make ones dreams come true and see possibilities, solutions and opportunities for the future where others see only problems.

Women Entrepreneurs in History

The number of women entrepreneurs increased up to 68% in U.S. from 1997 to 2014. And this number keeps growing each day nowadays in this era of women empowerment. Oprah Winfrey ranked as the 12th most influential women entrepreneur of 2015 by Forbes with “The Life You Want” back in 2014 and her Harpo Films production co-produced the film “Selma” which won an Award.

One of the latest: today entrepreneurship starts with the youngest in our generation. For example, Mikaila Ulmer launched her own business of Lemonade: Bee Sweet Lemonade at only 11 years old in 2015.

Why Enterprise is the Driver of Economic Development

Over the past several decades the role of entrepreneurship in economic development has become an essential factor of employment, and innovations bring enhanced the market competition. Entrepreneurship is the primary factor in the growth of economies. Each new business launched has an impact on an economy and affect people around it. The Theory of Kirzner (1973-2005) about entrepreneurship explains how the improvement of economic health affects individuals in the first world. The creation of new goods and services improves the quality of living of companies and individuals.

Entrepreneurs acquire capital from their equity sources or loans from banks to build their business which adds value to the creation of wealth, influencing the economy and industrial structure of a country directly.

Entrepreneurship helps to eliminate disparities between regions through an implementation of industry in countryside and areas less developed. The growth of industries and companies in various fields led to the development of services such as road, public transportations, health, education, and entertainment. The implementation of those industrial activities resulted in the development of a more vibrant economy.

Entrepreneurship Spreads Economic Power

The power of economy is, in fact, the natural consequence of industrial and commercial activities. The industrial development at times builds to a concentration of economic power of only a few, while entrepreneurship and the growth of companies acts to counter that concentration. Enterprise is a force that multiplies the players of an economy and reduces the concentration of economic power.

Entrepreneurs Create and Distribute Wealth

New businesses stimulate the fair redistribution of wealth and incomes for the interest of the country through a large population covering a larger geographical area and thus offering benefits to larger sections of society. Entrepreneurship leads to the emergence of secondary activities and therefore allows a multiplier effect in the economy.

Entrepreneurs are always seeking new opportunities. They explore and exploit various possibilities encouraging the active mobilization of funds and skills. They contribute to new products and services and develop new markets which grow an economy.

An enterprise contributes to increasing the Gross Domestic Product (GDP) and income per resident, which results in economic growth.

Improving the quality of life of a population is a characteristic of a country’s economic development. Entrepreneurs play a vital role in improving the quality of our communities and individuals’ lifestyles; they adopt the last innovations in the production of vast and various goods and services on a large-scale to reduce the cost. The goal is to offer a better product or service at a lower cost.

Worldwide entrepreneurs also contribute to a country’s exports and improves the trade balance which is important in economic development.

Entrepreneurship Encourages Innovation

An entrepreneur is first of all someone who has new ideas, who creates and innovates to solve a problem. An entrepreneur embraces change and tries to maximize profits while innovating. When a company approaches business driven by the evolution of technology, it encourages the economic development of the country.

Supporting entrepreneurship in a motivating, innovating and stimulating environment will result in economic development. It should be the primary concern of decision-makers, which also have the responsibility to lead and channel entrepreneurship projects through sectors that are part of the development strategy.

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