ROLE OF ENTREPRENEURSHIP IN ECONOMIC GROWTH AND DEVELOPMENT1 Flashcards
“An increase in the number of entrepreneur leads to an increase in economic
growth.”
This was according to the works of
Joseph Schumpeter,
Joseph Schumpeter, a professor
economics in University of Harvard
who studied the relationship of
entrepreneurship and economic growth.
Joseph Schumpeter,
According to him, the effect of
increased number of entrepreneur results to a
“concrete expression of their
skills, and more precisely, their propensity to innovate,”
He described this
innovative activity as the
“carrying out of new combinations”
He described this
innovative activity as the “carrying out of new combinations” which is
distinguished by five cases:
1) The introduction of a new product;
2) The introduction of a new method of production;
3) The opening of a new market;
4) The conquest of a new source of supply of raw materials or half-
manufactured goods; and
5) The carrying out of the new organization of any industry, like the creation
or the breaking-up of a monopoly position.
Through this innovative activity, an entrepreneur seeks to create
new
profit opportunities.
The increase in productivity mentioned above is a result of investments
stimulated by innovation, According to
R.D. Hisrich and M.P. Peters
“The role of entrepreneurship in economic development involves more
than just increasing per capita output and income, it also
involves in initiating
and constituting change in the structure of business and society.
Agribusiness encompasses primary production, upstream economic
activities related to the production and distribution of all inputs and services
used in on-farm production, and downstream industries involving all of
processing, manufacturing, transportation, and related services involved in
transforming raw agricultural produce into finished products for domestic
consumption or export.
(Manuel Q. Lim Jr.)
From the above definition of agribusiness and earlier definition of
entrepreneurship, we could conclude that Agribusiness Entrepreneurship
refers
innovation in the agribusiness sector
From the above definition of agribusiness and earlier definition of
entrepreneurship, we could conclude that refers to the innovation in the agribusiness sector (including all of its sub-
sectors) for the purpose of creating opportunities that could lead to increase
investments thus initiating economic growth under the conditions of risk and
uncertainty.
Agribusiness Entrepreneurship
Importance of Agribusiness Entrepreneurship
Creates Employment
Improves Quality of Life
Contributes to more equitable distribution of income and therefore eases
social unrest
Entrepreneurial undertakings contribute significantly to the continuous
improvement of living standards
Utilizes and mobilizes resources for great national productivity
Brings social benefits through the government
When entrepreneurs put up a business, they often
times need to hire or employ at least one or two other people in order to get
things done. When individuals are employed, they are able to feed their
families, support their children through school, provide them with decent
homes, acquire medical services whenever needed, and contribute to
government revenues through payment of income taxes.
Creates Employment
Entrepreneurs continuously innovate and develop
new products and services based on what they perceive as the needs of
society. They also look for ways in which these goods and services could be
more efficiently produced. Such innovative efforts lead to better machines
and more efficient production systems.
Improves Quality of Life
By putting up an enterprise in the locality entrepreneurs are
actually dispersing the benefits of development to other parts of the country.
When many segments of society are left deprived, social tensions (manifested
by immigration and overcrowding in urban areas, threats of revolution and
dissident movements) may arise. When income is more evenly distributed,
Contributes to more equitable distribution of income and therefore eases
social unrest
The· development of new products and
the delivery of needed services make life easier and comfortable for society
in general.
Entrepreneurial undertakings contribute significantly to the continuous
improvement of living standards
Our
country will develop faster economically if none of its resources were idle or
unused. Entrepreneurship also provides an avenue for making productive use
of capital resources such as family or personal savings. Otherwise, these may
remain unutilized or channeled to unproductive ventures such as gambling or
luxury spending, such as buying imported goods.
Utilizes and mobilizes resources for great national productivity
The government revenues
collected from taxes, duties and licenses paid by the entrepreneurs. The
government allocates the disbursement of these revenues to different
services to and projects for communities. These services and projects come
in the form of infrastructure such as roads and bridges, educational and
medical facilities and services, and maintenance of peace and order.
Brings social benefits through the government
The low productivity of agricultural production
is attributed to small and dispersed farm landholdings which hamper
operations of economies of scale. Industry clustering and a cooperative
system are proposed for efficient and effective operations.
Productivity Improvement
Only 1.3 million hectare of farmland is
irrigated, of which 815,000 ha, 40percent are serviced by efficient full scale
irrigation. Total area under rice cultivation is 3.12million hectare.
Only 1.3 million hectare of farmland is
irrigated, of which 815,000 ha, 40percent are serviced by efficient full scale
irrigation. Total area under rice cultivation is 3.12million hectare.
The lack of adequately maintained roads
connecting farms to markets limits the mobility of farm product
transportation. Investment in road and bridge construction offers
opportunities for private investors.
Infrastructure Development
According to the
Land Bank, the post-harvest losses of rice in 1999 were recorded at 14 percent
while perishable crop losses ranged from 28 percent to 42 percent.
Construction of Post-Harvest Facilities / Trading Centers -
