REPORTER 1

ROLE OF ENTREPRENEURSHIP TO THE ECONOMIC DEVELOPMENT

[Intro: Why Entrepreneurship Is Important to the Economy]

Entrepreneurship is important for a number of reasons, from promoting social change to driving innovation.
Entrepreneurs are frequently thought of as national assets to be cultivated, motivated, and remunerated to the greatest
possible extent. In fact, some of the most developed nations are world leaders due to their forward-thinking innovation,
research, and entrepreneurial individuals.

Entrepreneurs serve as the catalysts in the process of industrialization and economic growth. It is the
entrepreneur who organizes and puts to use capital, labor, and technology.

Great entrepreneurs have the ability to change the way we live and work, on local and national bases. If
successful, their innovations may improve standards of living, and in addition to creating wealth with entrepreneurial
ventures, they also create jobs and contribute to a growing economy. Technical progress alone cannot lead to economic
development, unless technological breakthroughs are put to economic use by entrepreneurs.

[Main Topic: Role of Entrepreneurship to the economic development]

Economic development - a process of upward change whereby the real per capita income of a country increases over a
period of time.

1. Capital Formation: 

Entrepreneurial ventures help generate new wealth. New and improved products, services, or
technology from entrepreneurs enable new markets to be developed and new wealth to be created. By
establishing the business entity, entrepreneurs invest their own resources and attract capital (in the form of
debt, equity, etc.) from investors, lenders, and the public. This mobilizes public wealth and allows people to
benefit from the success of entrepreneurs and growing businesses. This kind of pooled capital that results in
wealth creation and distribution is one of the basic imperatives and goals of economic development.

Entrepreneurs mobilize the idle savings of the public through the issues of industrial securities.
Investment of public savings in industry results in productive utilization of national resources. Rate of capital
formation increases which is essential for rapid economic growth. Thus, an entrepreneur is the creator of
wealth.

2. Generates Employment: 

Entrepreneurs are by nature and definition job creators, as opposed to job seekers. When you become
an entrepreneur, there is one less job seeker in the economy, and then you provide employment for multiple
other job seekers. This kind of job creation by new and existing businesses is one of the basic goals of economic
development.

Entrepreneurs generate employment both directly and indirectly. Directly, self-employment as an

entrepreneur offers the best way for independent and honorable life. Indirectly, by setting up large- and small-
scale business units they offer jobs to millions. Thus, entrepreneurship helps to reduce the unemployment
problem in the country.

3. Backward and Forward Linkages:

An entrepreneur initiates change which has a chain reaction. Setting up of an enterprise has several
backward and forward linkages. For example- the establishment of a steel plant generates several ancillary units
and expands the demand for iron ore, coal, etc. These are backward linkages. By increasing the supply of steel,
the plant facilitates the growth of machine building, tube making, utensil manufacturing and such other units.

4. Increase in Standard of Living: 

Increase in the standard of living of people in a community is yet another key goal of economic
development. Entrepreneurs play a key role in increasing the standard of living in a community. They do this not
just by creating jobs, but also by developing and adopting innovations that lead to improvements in the quality
of life of their employees, customers, and other stakeholders in the community.

Entrepreneurs set up industries which remove scarcity of essential commodities and introduce new
products. Production of goods on mass scale and manufacture of handicrafts, etc., in the small-scale sector help
 to improve the standards of life of a common man. These offer goods at lower costs and increase variety in
consumption.

REPORTER 2

5. Community Development and Social Change: 

Economic development doesn’t always translate into community development. Community

development requires infrastructure for education and training, healthcare, and other public services.
Therefore, as an entrepreneur needs highly educated and skilled workers in a community to attract new
businesses, an increase in educational institutions, technical training schools and internship opportunities will
help build the pool of educated and skilled workers.

Through offering unique goods and services, entrepreneurs break away from tradition and reduce
dependence on obsolete systems and technologies. This can result 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. However, with a project such as the U.S.
Agency for International Development's Kenya RAPID program, an innovative and automatic pump powered by
smart sensors fills people's water containers automatically, ensuring more than 184,000 people now have
improved access to clean and safe drinking water. 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, as more than 5 billion people
have mobile devices around the world. As the growth of the smartphone market continues, technological
entrepreneurship can have a profound, long-lasting impact on the world.

Moreover, the globalization of technology means entrepreneurs in developing countries have access to
the same tools as their counterparts in developed countries. They also have the advantage of a lower cost of
living, so a young entrepreneur from a developing country can compete with a multimillion-dollar existing
product from a developed country.

6. Balanced Regional Development: 

Entrepreneurs setting up new businesses and industrial units help with regional development by locating
in less developed and backward areas. The growth of industries and business in these areas leads to
infrastructure improvements like better roads and rail links, airports, stable electricity and water supply, schools,
hospitals, shopping malls and other public and private services that would not otherwise be available. Every new
business that locates in a less developed area will create both direct and indirect jobs, helping lift regional
economies in many different ways.

Entrepreneurs in the public and private sectors help to remove regional disparities in economic
development. They set up industries in backward areas to avail various concessions and subsidies offered by the
central and state governments.

7. Add to National Income: 

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.

Entrepreneurs locate and exploit opportunities. They convert the latent and idle resources like land,
labor, and capital into national income and wealth in the form of goods and services. They help to increase net
national product and per capita income in the country, which are important yardsticks for measuring economic
growth.

8. Exports: 
Any growing business will eventually want to get started with exports to expand their business to
foreign markets. This is an important ingredient of economic development since it provides access to bigger
markets and leads to currency inflows and access to the latest cutting-edge technologies and processes being
used in more developed foreign markets. Another key benefit is that this expansion leads to more stable
business revenue during economic downturns in the local economy.  

9. Economic Independence:

Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture indigenous

substitutes of imported products thereby reducing dependence on foreign countries. Businessmen also export
goods and services on a large scale and thereby earn the scarce foreign exchange for the country. Such import
substitution and export promotion help to ensure the economic independence of the country without which
political independence has little meaning.