How Entrepreneurs Impact An Economy Economics Essay

1519 words - 7 pages

How Entrepreneurs Impact An
Economy
Introduction
As economies continue to integrate due to globalisation and formally closed
economies like India and China march toward total liberalisation,
entrepreneurship is on the increase. A close analysis of developed and
industrialised economies indicates a common denominator that stands out
amongst all of them. This is the most important role played by
entrepreneurship and entrepreneurs in such economies. This phenomenon
has proved to us that if an economy is to develop fully, entrepreneurship
should be allowed to flourish. Therefore it is the objective of this paper to
critically analyse the impact of entrepreneurs in any given economy. In this
paper the writer will identify and discuss the many benefits afforded to an
economy through entrepreneurs and entrepreneurship and the disadvantages
of the same and draw conclusions on the overall impact of the entrepreneurs.
Innovation
Individuals often resort to entrepreneurship for one of the following reasons;
they find a market niche and have the solution to profit from such niche; they
have been unable to find suitable employment or a suitable means of income
and therefore have resorted to using their creativity to generate an income for
themselves; or they have the technological know-how and the financial
resources (or able to source all of the above) necessary to generate income
by satisfying a need in the marketplace. Irrespective of which of the above led
an individual to become an entrepreneur it is clear that innovation and
creativity is the driving factor and therefore, it can be stated that the biggest
impact of entrepreneurs to an economy is the innovative contribution that they
make.
Job Creation
As stated in the previous section, one of the main reasons that individuals
tend to become entrepreneurs is because they are unable to find suitable
jobs. As a result, by being enterprising, creative and finding a market niche,
not only are they able to generate an income for themselves but also to
employ other individuals in their business operations. Therefore, one of the
most positive impacts that entrepreneurs make on an economy is job creation
and the reduction of unemployment levels. In developed countries we see
that almost 40 – 50% of the workforce are employed in small and medium
scale business enterprises that were started up by very enterprising
individuals. Likewise in countries like India, we see that millions of women
have been able to pull their families out of poverty through self-employment
and entrepreneurship that has been made possible by different Non-
Governmental Organisations and due to the availability of such resources
through micro finance etc. Africa is another good example of small scale
entrepreneurs helping to reduce poverty and helping many to avoid
destitution. Therefore based on everything that has been stated above it is
apparent that entrepreneurs can cause a great degree of impact on an
economy through job creation and...

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