Role of an Entrepreneur in Economic Development

Role of an Entrepreneur in Economic Development

The important roles of entrepreneur as follows:-

Role of Entrepreneur as an innovator-

  • Schumpeter laid emphasis on the innovative role of an entrepreneur. He pointed out that an entrepreneur performs managerial functions also. However, a person not performing innovative role cannot be called an entrepreneur. Therefore, according to Schumpeter an individual to be called an entrepreneur must have innovative quality. According to him, role of economic progress of a nation depends upon the rate of innovation which in turn depends upon the distribution of entrepreneurial talent in the population. Higher the rate of innovation, the higher will be the rate of economic progress of a nation.
  • An innovator discovers business ideas, new products, new markets, new ways of marketing, new methods of solving business problems, new organizations and new combination of services etc.
  • An entrepreneur discovers an idea and develops it into a business proposition. He establishes his new enterprise on the basis of his innovation. He takes initiative to explore the innovation so as to excel others or lest others may grab the idea (opportunity) and explore it to their advantage.
  • An entrepreneur is a-creative person. He creates something new-a new product, a new market, or a new method of marketing a product. For example B. S. Narayan, an electrical and electronics engineer with Bharat Electronics Limited (BEL) innovated the idea of manufacturing special oil filled pulse transformers and chokes. The technical know how grew out of his experience and interaction with customers. He resigned his nine years old job and became an entrepreneur to manufacture special oil filled pulse transformers and chokes under the name and style of Excel Par Electronics.
  • An entrepreneur is basically a creator of ideas. He conceive a creative idea and develop the idea into business proposition. He acquires resources such as land, labour capital and produces the growth and services to market them with the co-operation and support from external sources who can influence the success of an innovation. Such sources include Government agencies, investors, vendors, suppliers and creditors.

Role of Entrepreneur in Generation of Employment Opportunities-

An entrepreneur generates employment opportunities. Needless to say that there is limit for employment opportunities in Government organizations, public sector undertakings and private enterprises However, entrepreneurship offers unlimited opportunities for employment. An entrepreneur generates employment not only for self and members of his family but also for others who work with him. However the number will depend upon the size and requirement of the enterprise concerned.

Government of India is also laying stress on small scale business to provide self employment to crores of educated and uneducated unemployed youths in the country.

National Alliances of Young Entrepreneur (NAYE) is rendering valuable assistance to young entrepreneurs in collaboration with public sector banks in the country. It helps in identifying potential projects, conducting project feasibility report and providing financial assistance and other logistic support to the young entrepreneurs. NAYE has also established women wing to help women entrepreneurs. It has held several national and international conferences to discuss entrepreneurial development programmes for women and other entrepreneurs particularly in rural and backward areas.

In addition, the Government has come out with new schemes to help special categories of entrepreneurs such an ex-army personnel, handicapped persons educated youths (Graduate Scheme) Non-resident Indians (NRIS) and people living in economically backward regions (areas).

Entrepreneur in Complementing and Supplementing Economic Growth-

Entrepreneur is a key to complement and supplement economic growth. Entrepreneur brings about all-round economic growth. In fact entrepreneurial development is a prerequisite to economic development.

An entrepreneur complements economic growth. The Government’s disinvestment policy in public sector is a pointer in this direction. The Government has come to realize that it should concentrate on purely governmental functions. It should not undertake economic functions which could well be left to be taken care by private entrepreneurs.

A large number of industries which were reserved for public sector are opened to private sector. For example, electricity, generation, petro-chemical industries national highways and bridge construction, education, public transports are being opened up for private entrepreneurs.

Telecom sector has recently been opened to private entrepreneurs. As a result numbers of international players have emerged in this field. For example, Airtel, Motorola, Hutch, Idea etc. have complemented government’s effort to provide telecommunication services.

Entrepreneurs also supplement Government effort in establishing industries in number of areas. Now-a-days a number of new institutions have entered in the field of education. A large number of private entrepreneurs have started educational institutions in the field of technical education, engineering, medicines, hospitality industry, hotel management, hospital administration, electricity generation distribution and provision of infrastructural facilities.

From the above discussion complementary and supplementary role of an entrepreneur in economic growth of the country would be crystal clear.

Entrepreneur in bringing social stability

The last three centuries i.e., 18th, 19th and 20th centuries have seen unprecedented social change. However, the pace of social change has been very slow during the 18th century. It became faster during the 19th century and fastest during the 20th century. The industrial revolution changed the industrial scene. Production which was confined to local limits became international in character i.e., goods were not produced at the place of consumption but were produced in one country and were sent to be consumed in a number of countries.

However with the liberalization and globalization, a stage of social stability is approaching very fast industrial and economic activities give rise to economic power. The existing entrepreneurs and business organizations have a tendency to grow bigger and bigger i.e., it leads to concentration of economic power Emergence of new entrepreneurs will check concentration of economic power. It will also reduce unprogressive growth of existing industrial and business enterprises leading to social stability.

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