Entrepreneurship plays an important role in the economic and social development of a nation. Due to economic and social development, entrepreneurs create economic and social wealth. The importance and significance of entrepreneurship is explained as follows:
1. Economic Development: Entrepreneurship activity contributes to the economic development of a nation. Due to entrepreneurship, new and innovative materials, products, technologies, processes are developed. This increases production and distribution of goods and services, resulting in growth and development of the nation.
Developed countries like Japan, USA, Germany, etc., owe their economic development to the contribution of their entrepreneurs. Without the innovative role of entrepreneurs, economic development of a nation would get hampered.
2. Social Development: Entrepreneurs play an important role in social develipment of a nation. Professional and successful entrepeneurs recognize and respond to social development needs of the society.
The entrepreneurs contribute funds towards social development activities like health, education, and community development activities. They alsp generate new and innovative ideas to enhance social development in the society.
3. Regional Development: The entreperneurs set up industries not only in urban areas, but also in backwards areas. Due to government incentives such as cash subsidy, tax holiday, duty concessions, etc., entrepreneurs are induced to set up industries in backward areas. As a result of such initiative on the part of entrepreneurs, the backward areas get developed not only economically but also socially.
4. Development of managerial capabilities:
The biggest significance of entrepreneurship lies in the fact that it helps in identifying and developing managerial capabilities of entrepreneurs. An entrepreneur studies a problem, identifies its alternatives, compares the alternatives in terms of cost and benefits implications, and finally chooses the best alternative.
This exercise helps in sharpening the decision making skills of an entrepreneur. Besides, these managerial capabilities are used by entrepreneurs in creating new technologies and products in place of older technologies and products resulting in higher performance.
Entrepreneurship results into creation of organisations when entrepreneurs assemble and coordinate physical, human and financial resources and direct them towards achievement of objectives through managerial skills.
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