Importance of Entrepreneurship
Entrepreneurship offers the following benefits:
1. 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.
2. Creation of organizations
Entrepreneurship results into creation of organizations when entrepreneurs assemble and coordinate physical, human and financial resources and direct them towards achievement of objectives through managerial skills.
3. Improving standards of living
By creating productive organizations, entrepreneurship helps in making a wide variety of goods and services available to the society, which results into higher standards of living for the people.Possession of luxury cars, computers, mobile phones, rapid growth of shopping malls, etc. are pointers to the rising living standards of people, and all this is due to the efforts of entrepreneurs.
4. Means of economic development
Entrepreneurship involves creation and use of innovative ideas, maximization of output from given resources, development of managerial skills, etc., and all these factors are so essential for the economic development of a country.
5. Job Creation
We know that job creation is vital to the overall long-term economic health of communities, regions, ad nations. Entrepreneurial ventures play very important role in it. Small business create more jobs than large business do. During economic recession, when large companies are on their way to retrenchment of their work force, individuals whose jobs are eliminated find employment with small business. The creation of jobs by small businesses is expected to continue into the future as new firms start small and grow.
Innovating is a process of creating, changing, experimenting, transforming and revolutionizing. Innovation is one of the key distinguishing characteristics of entrepreneurial activity. The passionate drive and intense hunger of entrepreneurs to forge new directions products and processes and to take risks set in motion a series of decisions that lead to the innovations that are important for economic vitality. Without these new ideas, economic, technological, and social progress would be slow indeed. The “creative destruction” process of innovating leads to technological changes and employment growth. Entrepreneurial firms act as these “agents of change” by providing an essential source of new and unique ideas that might otherwise go.
7. Other Contribution
- Entrepreneurship in small businesses helps in distribution of products of large business. They, thus, support the large business houses.
- It offers business avenues to women and minorities. Women and minorities are allowed the benefit of financial independence and a chance to exhibit the ability to manage business enterprises.
- Dispersal of economic activities to different sectors of economy and identifying new avenues of growth.
- Improvement of the standard of living of different weaker sections in the society.
- Bring socio political change in the society.
- Develop technological know-how.
- Improve culture of business and expand commercial activities.
- Entrepreneurship acts as a change agent to meet the requirements of the changing markets and customer preferences.
- Develop a culture of achievement orientation.
- It helps in bringing about change and development of the civilization through change in trade, comment be and industrialization.
- It arouses the need for achievement in individuals, which brings about a change in the economic scenario through economic development and growth.
- It results in exploitation of economy’s resources, such as labour, capital and technology to the fullest extent.