Entrepreneurship is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation.
An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. The opportunity to become an entrepreneur requires four things.
First, there must be opportunities or situations to recombine resources to generate profit. Second, entrepreneurship requires differences between people, such as preferential access to certain individuals or the ability to recognize information about opportunities. Third, taking on risk is a necessity. Fourth, the entrepreneurial process requires the organization of people and resources.
Below are four ways entrepreneurs impact a nation’s economy.
1. They provide employment opportunities
New businesses need to hire employees. They create jobs and these economic opportunities uplift and support communities through increasing the quality of life and overall standard of living. Successful entrepreneurialism often requires the skills and labour of many hands; and that necessitates job creation. As a thriving business grows so do the opportunities for others and the cumulative impact of new start-ups, which would eventually minimize the alarming rate of unemployment.
2. Investing in products and services
Entrepreneurs create new businesses in response to the unmet needs and demands in the market. That is, there is an opportunity to provide a product or service that is not currently in existence, or otherwise available. They enable access to goods and services that populations require in order to be productive.
The success of an entrepreneur is ultimately in creating a product or service that adds value to the lives of its users; whether that is an inherent need for the item or a simple desire to have it. Either way, innovation on this scale can help to push a market forward on a domestic level, and where relevant, drive exports to new overseas markets. This again is a wealth-creating exercise, which is a key driver of economic growth.
3. Commerce and regional economic integration.
As it stands, technology has made it possible for small, entrepreneur-led businesses to expand into regional and global markets. When new businesses export goods and services to nearby regions, these enterprises contribute directly to a region’s productivity and earnings. This increase in revenue strengthens an economy and promotes the overall welfare of a population. Engaging in regional and international trade promotes investment in regional transportation and infrastructure, which also strengthens a nation’s economy. This has never been more true than it is today, as we live in an increasingly interconnected global economy.
4. Community Development
Entrepreneurs regularly nurture entrepreneurial ventures by other like-minded individuals. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.
Oftentimes, the statistics are hard to measure, not all entrepreneurs wish to boast of their charitable activities, but it is fair to say that many successful business owners, some of whom will have come from financially insecure upbringings, are keen to redistribute their new-found wealth to charities and local community ventures.
The bottom line of vibrant entrepreneurialism is that it creates wealth: for the entrepreneur, for the people that are employed as a result and for the local economy. It creates wealth on a national scale for the government in the form of taxation, which is then redistributed accordingly to the services and communities that need it the most.