What is the Importance of Entrepreneurship? What are its Relevance?
How important is entrepreneurship in economic development? As long as humanity continues to exist on planet earth, the needs/wants of mankind will continue to subsist side by side. Over the years, from the primitive man to the present day millennial, man has always found ways/means of meeting these challenges. Entrepreneurship embodies the means, methodologies and resources that you put together in offering a service or product that serves a particular market or audience.
You will discover that entrepreneurship has assumed such a critical role in the economies of many countries, that there is an avalanche of resources available on the subject. Proponents of the discipline are advocating that governments pass legislation making the study of entrepreneurship compulsory from primary schools.
Entrepreneurs have the ideas, potentials and the capacity to alter the way we live, work and play! You must appreciate the fact that if their innovations hit the mark of success, then our standard of living can be improved. Entrepreneurs and their endeavors create wealth, create job openings as well as lay the foundations for a prosperous/productive social economy.
Entrepreneurship is therefore important to people for the following reasons:
Need and Importance of Entrepreneurship Education to Development, Jobs, Economy and a Better Life
Entrepreneurship Creates New Businesses
Entrepreneurship is built on the backbone of innovation. Even if the service or product has existed but the entrepreneur succeeds in improving its form or effectiveness, it is also a form of doing something new.
These new businesses have a consequential circle of virtue. What this means is the endeavors of the entrepreneur has the potential to cause a cascading lateral or vertical multiplier effect, that is the new venture gives birth to other businesses; directly or indirectly.
A good example is the introduction of Mobile Telephone services in Nigeria in 2001. The emergence of the telecom operators gave birth to related businesses like recharge cards distributors and resellers, who made available to subscribers the different denominations of airtime cards.
In addition, the newly established Mobile Telecommunication industry also gave birth to other associated ventures like call centers, network maintenance firms and providers of telecommunication hardware.
The demand for skilled Telecomm workers increased and you discovered that there was a concomitant increase in the number of educational institutions offering such courses.
Entrepreneurship Boosts a Nation’s Income
In extending the train of thought from 1, you will discover that entrepreneurship offers government the opportunity to shore up its revenue base. New and improved services or products means that new markets are targeted, thereby creating a new monetary value chain.
The attendant effects of increased employment and higher earnings can positively impact on the economy with higher tax revenues, buoyed by higher government spending.
Entrepreneurship can therefore offer a leeway for governments that desire to wean their economies from an over- dependence on revenues generated from commodities/natural resources.
Entrepreneurship Inspires Social Change
Innovation is the pillar of entrepreneurial undertakings. Through the offer and use of new products and improved services, an entrepreneur, unwittingly or not, provides the platform for people to break away from the stifling hindrances of a particular way of doing things. You will find that the results of such innovations include a better quality of life, greater morale and economic emancipation.
An appropriate example will center on smart phones and their smart apps. Innovations in the manufacture of these smart phones, means that they are becoming increasingly affordable. Hence, you will find that the online business in the developing world can access the same resources and information, as his/her counterpart in the developed world.
Entrepreneurship Fosters Community Development
CSR, also known as Corporate Social Responsibility, forms a veritable tool by which entrepreneurs engage with their immediate communities, in advancing social interests and achieving communal goals/objectives. Entrepreneurship allows for the investment of a part of profits made, into community projects, in addition to assisting charitable causes in most developing countries.
You will recall that Bill Gates and his wife Melinda, have through their foundation, bankrolled important social issues like the eradication of Polio in Africa and the promotion of the rights of the girl child.
In hindsight, it can be stated that the qualities that motive an entrepreneur to effect change in the economic sphere, are the same that motivate him/her to assist society with the drive for social change and broader inclusiveness.
The logic behind this assertion is simple. If you agree that entrepreneurs create new products/services via innovation; with one of the results of this action being the creation of new markets, it then follows that the new venture will require the engagement of competent hands, to drive the operations of the venture.
When you collate the effects of several innovations launched across several sectors of an economy, and then you will realize that the employment numbers/ statistics will quickly rise in tandem.
You will agree that there is a relationship between entrepreneurship and economic development. The importance of entrepreneurship in the society has served as useful reference points for policy makers, business owners and research institutes. There is no doubt that entrepreneurship will continue to have a positive impact on economies and societies around the world.