EDS 111

Importance of Entrepreneurship to
Economic Development
Objectives
 At the end of this lecture, students will be
able to;
 Identify the importance of entrepreneurship
in terms of economic development in the
areas of:
 job creation, wealth creation, poverty
alleviation, resource provision, support to
large industries, e.t.c.
Introduction
 Entrepreneurship as the engine of economic
growth is very important to the economy of a
nation.
 It is the vehicle that coveys the economic
vitality and national endowment to different
parts of the nation for the enhancement of the
living conditions of the populace of the nation.

 Without entrepreneurship, development is

difficult if not impossible.
Importance of Entrepreneurship
 Entrepreneurship is important to economic
development in the following areas;
 Employment generation
 Poverty Alleviation
 Wealth Creation
 Promotion of Effective Domestic Resource
Utilization
Cont’
 Equitable Distribution of Income and Wealth
 Interdependence of Business
 Maintenance of Competition
 Conservation of Foreign Exchange
 Maximization of Potential.
Cont’
 Employment generation
 Entrepreneurship creates more jobs among
the old, young, retirees, unemployed
graduates and non graduates.
 For instance, it was estimated in 1990 that
over 80% of the industrial labour in Nigeria
was employed in the micro, small and
medium scale establishments (MSMEs).
Cont’
 Poverty Alleviation: Poverty is the
degradation in the standard of living of the
populace of a particular nation.
 In Nigeria more than 60% of the entire
population lives below the poverty line.
Entrepreneurship helps in alleviating the
poverty situation of a nation
Cont’
 Wealth Creation: Entrepreneurship as a
catalyst for economic development involves
creativity and innovation.
 Wealth creation is the essence of every
entrepreneurial venture and innovativeness.
Cont’
 Promotion of Effective Domestic Resource
Utilization: Entrepreneurship in form of
MSMEs encourages the use of local raw
material especially in the areas of agricultural
and manufactured businesses.
Cont’
 It also encourages traditional craftsmanship
through ethnic entrepreneurship hence
reducing a country’s excessive dependence
on imported raw materials.
Cont’
 Equitable Distribution of Income and
Wealth: Entrepreneurship also ensures even
distribution of wealth in the economy.
 This is achieved through the existence of
entrepreneurial activities in every part of the
country.
 Government facilities and incentives are
shared equally among the micro, small and
medium scale enterprises across the nation.
Cont’
 Interdependence of Business:
Entrepreneurship propagates independence
among businesses.
 No business is an island, enterprises relate to
one another through either buying or selling
of goods and services.
 Many large firms existing today depend on
the existence of the MSMEs and without
them, the large firms cannot perform
effectively.
Cont’
 Maintenance of Competition:
Entrepreneurship helps in sustaining
competition in the economy. In the age of
rapid economic changes, competition is very
important and this can come in form of price
differentiation, credit terms, product/service
improvement, inter- industry competition and
so on
Cont’
 Conservation Of Foreign Exchange
 Entrepreneurship helps to promote Nigerian
economy in terms of foreign exchange
conservation. Through import substitution,
Nigeria has been able to conserve her foreign
exchange which has boosted the country’s
Gross National Income (GNI)
Cont’
 Maximization of one’s potential: Through
the process of idea generation, sources of the
required funds, combination of others
resources, establishment of the enterprise
and taking the risks involved in running the
enterprise, an entrepreneur will be able to
maximize his or her potential.
Conclusion
 Entrepreneurship plays important role in
enhancing economic development of every
nation.
 Every development starts and ends with
entrepreneurship.
Cont’
 The acceptance of this fact will help
everybody both young and old to be involved
in the entrepreneurial development of their
nation. Nothing just happens.
 All tangible development are as a result of
entrepreneurship.
THANK YOU