Entrepreneurship & Economic Development Flashcards
- It is a scheme aimed at improving living standards
- It is the process by which emerging economies become advanced economies; countries with low living standards become nations with high living standards
- Also refers to the process by which the overall health, well-being, and academic level the general population improves
Economic Development
Refers to higher levels of
education and literacy, workers’ income, health, and lifespans
Improved living standards
How are Entrepreneurship and Economic Development intimately related?
- The entrepreneurial process is a major factor in economic development
- The entrepreneur is the key to economic growth
- Whatever be the form of the economic and political set-up of the country, entrepreneurship is indispensable for economic development
Role of Entrepreneurship in Economic Development
- Entrepreneurs __________ by mobilizing the idle savings of the public.
- They employ their own as well as borrowed resources for setting up their enterprises.
- Such types of entrepreneurial activities lead to value addition and creation of wealth, which is very essential for the industrial and economic development of the country.
Promotes Capital Formation
Role of Entrepreneurship in Economic Development
- Entrepreneurs provide immediate large- scale employment to the unemployed which is a chronic problem of underdeveloped nations.
- With the setting up of more and more businesses, entrepreneurs play an effective role in reducing the problem of unemployment in the country, which in turn clears the path towards the economic development of the nation
Creates Large- Scale Employment Opportunities
Role of Entrepreneurship in Economic Development
- Entrepreneurs help to remove regional disparities through setting up of industries in less developed and backward areas.
- The growth of industries and businesses in these areas lead to a large number of public benefits like road transport, health, education, entertainment, etc
Promotes Balanced Regional Development
Role of Entrepreneurship in Economic Development
- Industrial development normally leads to a concentration of economic power in the hands of few individuals which results in the growth of monopolies
- In order to redress this problem a large number of entrepreneurs need to be developed, which will help __________ amongst the population
Reduce the Concentration of Economic Power
It is the natural outcome of industrial and business activity
Economic Power
Role of Entrepreneurship in Economic Development
- Entrepreneurial activities generate more activities and give a multiplier effect in the economy
- It stimulates equitable redistribution of wealth and income in the interest of the country to more people and geographic areas, thus giving larger sections of the society
Wealth Creation and Distribution
Role of Entrepreneurship in Economic Development
- Entrepreneurs explore and exploit opportunities, encourage effective resource mobilization of capital and skill, bringing in new products and services and develop markets for growth of the economy
- In this way, they help __________ of the people in a country
Increasing Gross National Product Per Capita Income
- It measures the berate income earned per person in a given area in a specified year
Formula:
Area’s total income / total population
Per Capita Income / Average Income
Role of Entrepreneurship in Economic Development
- Entrepreneurs play a key role in __________ of the people by adopting the latest innovations in the production of a wide variety of goods and services in a large scale that too at a lower cost
- This enables the people to avail of better quality goods at lower prices
Improvement in the Standard of Living
Role of Entrepreneurship in Economic Development
- They produce goods and services on a large scale for the purpose of earning huge amounts of foreign exchange from export in order to combat the import dues requirement.
- Hence, import substitution and export promotion ensure economic independence and development
Promotes Country’s Export Trade
Role of Entrepreneurship in Economic Development
- Entrepreneurs like to work in an environment of change and try to maximize profits by innovations.
- When an enterprise is established in accordance with the changing technology, it __________ that stimulate the process of economic development in the country.
Induces Backward and Forward Linkages
Role of Entrepreneurship in Economic Development
- Entrepreneurs act as catalytic agents for change which results in a chain reaction.
- Once an enterprise is established, the process of industrialization is set in motion. This unit will generate demand of various types of units required by it and there will be so many other units that require the output of this unit.
- This leads to the __________ of an area due to an increase in demand and setting up of more and more units
Facilitates Overall Development
