Entrepreneurship is considered to be a national asset of a country as it contributes to the country’s overall GDP. It is responsible for a large proportion of a country’s economic growth, provides jobs to the unemployed, raises the standards of living, and inspire other people to take on entrepreneurship. It is for this reason that entrepreneurship measures the country’s social wellness as well as its economic development. There are many reasons why entrepreneurship is important. Few of the reasons are mentioned below:
- Influence others to become entrepreneurs
- Boost the economic growth
- Escalate productivity
- Generate new employment options
- Aid in bringing social change
- Creates Innovative Environment
Influence others to become entrepreneurs
Entrepreneurs often inspire others to become an entrepreneur as well. They play a vital role in the economy. They do so with their actions and their ability to make their business into a success. There are many entrepreneurs who started from scratch and now own a large business empire, all because of their hard work and their refusal to give up on their dream. Such entrepreneurs hold motivational talks to inspire others to follow in their footsteps and make a mark of themselves in the world.
Other than this, there are many entrepreneurs who give a large sum of money to social causes that they support. In this way, they motivate others to donate some of their wealth to the deserving so that others can benefit from their success as well.
Boost the economic growth
Entrepreneurship is also responsible for boosting the economic growth of a country. When an entrepreneur sets up his/her business, he/she does that with the aid of a loan. This loan is then repaid in portions over the next years. Besides this, an entrepreneur, in setting up their business seeks the help of other businesses. For example, they may buy office furniture from some other business. This way the demand is enhanced somewhere else in the economy.
Other than this, investors from different regions also start showing interest in your business if it seems promising to them. This way, they also contribute to the economic development of any developed or under-developed country.
Besides this, when the conditions of entrepreneurship are improved, better infrastructure is provided, which in turn has a positive effect on economic growth. This also helps in the elimination of poverty from the country.
Entrepreneurs have the potential to increase the productivity of the firms present in the market. They can exert pressure on them to complete their work on time to increase the productivity and efficiency of those firms.
Besides this, some companies may be more efficient and possess the ability to wok more smartly than other companies that fail to keep up with the increasing demand. This way, the less competitive businesses will be replaced by their competitive counterparts. This will give rise to more efficient companies in the long-term.
Other than this, entrepreneurs can also introduce new knowledge and tricks to work in the industry. Their ways and ideas can be adopted by others working in the same industry. In this way, they can bring about a change in the working of firms, thereby, increasing productivity.
Entrepreneurship also has the power to create a completely different industry. This generates new employment opportunities and a sense of buzz among the customers to get their hands on a new product. This helps in creating a rise in demand for the product which helps in bringing life back to the economy.
Generate new employment options
The main reason why entrepreneurship is important is that it aids in the generation of new employment options for the people. Every business requires a workforce comprising of people to operate. It is for this reason that businesses are a great source of employment for the people. And, as the business expands, the job opportunities also grow along with it. In a similar way, when a business is functioning well and is expanding, there are many people and businesses that benefit from it. Among them include courier services, raw material providers, distributors, agencies, etc.
Besides this, the employees will also benefit from a raised income and they will need to utilize their income elsewhere. Hence, the cycle of boosting the economy continues. This also causes demand in a certain product or service, which in turn can help in creating employment as well for some other business.
Aid in bringing social change
Entrepreneurship can also be labeled as a means of bringing social change to the community. They can do so by introducing new and innovative products in the market. This has caused many people to switch over to new ways and adopt them as their daily part of life.
There are many examples of entrepreneurship that have brought about social change such as Uber.
Uber starts with the idea of providing safe and convenient travel. It is a new experience for the people who wished to commute from one place to another. Uber provides them a reliable and quick option to book themselves a taxi service. It is actually a revolution in the taxi industry. Many other brands started emerging in the market with the same goal, that is, to provide a convenient taxi service to the people.
Uber then went a step further and introduced Uber Eats. Uber Eats’ main goal was to serve people food in time in the comfort of their homes. All people had to do was pick out their food from their smartphones and make a reservation on Uber Eats. Uber Eats would then pick up your order from your chosen restaurant and deliver it to your doorstep. This simplicity and ease in ordering and getting your food delivered convinced many people to switch over to Uber Eats for satisfying their food cravings.
Another example that can be quoted in this context is that of Netflix. Netflix is the new version of getting any show or movie to watch at the comfort of your home at a low price. The days of requesting your cable operator to play a certain movie or show are over. So are the days of heading over to Blockbuster to rent out your favorite movie to watch on movie night. Its place is now taken up by Netflix which provides you with an array of movies and shows that you can watch in HD laden on your couch with chips and soda.
It is the new stay-at-home entertainment and was particularly helpful in the on-going pandemic when people could not get out of their homes to enjoy a movie at a cinema. This has, however, affected the cinema industry but has resulted in the boost of other eatery industries as well as food delivery services.
Besides this, entrepreneurship has also been front and center in bringing about social change from educational point-of-view. Websites like Zoom have now made conducting meetings from the comfort of your own home much easier. This has also allowed for conducting online classes for people who cannot commute to their place of study free of charge. Other than this, there are many websites available that offer courses and teach their students a very low price all the while sitting at home. All these practices have contributed greatly to bring social change to our communities. While at the same time, improving and enhancing our way of life.
In conclusion, the answer as to why entrepreneurship is important can be deduced from the above-mentioned points. However, the answer to whether entrepreneurship is good or bad, is that it is inevitably a good thing. It helps in the boosting of the economy and altering our way of life. It propels us into better living conditions and encourages us to adapt to change to improve our standard of living. Other than this, it makes us so used to the new and innovative changes that we cannot imagine our lives without it. An example of this is Netflix, Google, and even e-commerce websites.
Creates Innovative Environment
In this day and age, people are struggling to be rich to get all amenities for themselves and for their families and they want to do something which has not been done before. After listening to some motivational stories of richer people in the world they want to be on that list. So smart people start thinking about what they can do to be on that list.
We all know ” Need is the mother of invention” this fits here perfectly in the modern entrepreneurial environment of the world and this creates a competitive environment between individuals and economies. As a result, we see new successful ideas and innovative products. An innovative entrepreneur can create products according to the changing demands of the market. This environment creates more research and development facilities in the country and most of the time more revenue for the country. And this environment says itself why entrepreneurship is important
The dark side of the Entrepreneurship
While there are too many benefits of entrepreneurship we should consider the dark side of entrepreneurship. Individuals can go in depression and can get stress if the business situation is not as he requires.
One of the leading entrepreneurs also admits that the entrepreneur could also be a difficult employee for any company as he wants his own rule in his business this is why he started a business.
Failure fear is also playing a very bad role in entrepreneurship and it can lead to serious mental health situations for the entrepreneur.
Most of the time entrepreneurship is beneficial for the country but sometime it could impact a negative role in the country’s economy. For example, research about Italy showed that self-employment in Italy is not contributing enough in the country’s economy and for this reason, I will suggest governments should make the entrepreneurship friendly policies with strict observings.
Waqar Hussain is the founder of The Business Goals. He writes about entrepreneurial strategies and is an SEO consultant by profession. He is a B.Com, GDM, and an MBA from the Australian Institute of Business.