Why Is Entrepreneurship the Engine of Economic Development?

Entrepreneurial activity, or in other words, the establishment of new organisations, is what supports local economies, what supports our country’s GDP as well as what helps the stock market continue to grow. We frequently hear that entrepreneurship is vital, however it’s difficult to overstate just how essential entrepreneurship is for the economy at large.

What Is Entrepreneurship?

Entrepreneurship is the capacity of people and companies to take on risk in the pursuit of innovative ventures. All throughout history, the individual efforts of entrepreneurs have been the driving force of the modern market economy.

However, entrepreneurial drive in and of itself is not sufficient in order to deliver sustained economic growth and development in a modern economy.

Institutions that support entrepreneurship, such as those that guarantee freedom of information or freedom and ease of establishing and growing a business, are necessary to translate innovative ideas into larger economic and social benefits. Free markets, protection of property rights, and the rule of law are at the core of the framework needed to make entrepreneurship work.

New Opportunities And Threats

Several dynamic forces – such as technological disruption, fluctuating economies or demographical changes – have brought forth new opportunities and threats for organisations as well as transformed societies from all across the globe.

In order to handle these shifting forces, governments, public as well as private organisations, and the public are more and more cognisant of the importance of entrepreneurship. Entrepreneurship is a multidimensional phenomenon and is analysed as a process, in order words a resource or a state-of-being.

The entrepreneurial process is one of the key factors in the economic development of a country or region. However, researchers have expressed differing views about the relationship between the stages of economic development as well as entrepreneurship during the time.

What Are The Benefits Of Entrepreneurship?

Entrepreneurship Improves Productivity

Entrepreneurship is responsible for injecting the economy with a fresh batch of higher-producing firms, increasing competition among existing businesses, and pushing out less-productive ones.

Entrepreneurship Spurs Innovation

New firms are disproportionately responsible for commercialising new innovations, particularly radical innovations that spawn entirely new markets or substantially disrupt existing markets.

Entrepreneurship Creates Jobs

New and young businesses, not small businesses, are the engine of net job creation in the economy.

Many individuals become entrepreneurs as they dream of becoming billionaires or as they love the idea of being in charge. However, there are also those people who are motivated as they want to be a driving economic force. They want to establish new jobs, innovate new technologies and assist with pushing  us all forward. We need to do all that we are able to in order to support all entrepreneurs as well as continue helping our economy thrive — even during periods of hardship.

Get in touch with the Digital School of Marketing

If you would like to become an entrepreneur in the media industry then you need to do our Entrepreneurship Course. For more information, please follow this link.