INTRODUCTION
Economic development essentially means a process of upward
change whereby the real per capita income of a country
increases over a period of time.
Entrepreneur plays a vital role in economic development.
Entrepreneurs serve as the catalysts in the process of
industrialization and economic growth.
Technical progress alone cannot lead to economic
development, unless technological breakthroughs are put to
economic use by entrepreneurs.
Some of the roles of entrepreneurs are:-
1. Capital Formation
2. Improvement in Per Capita Income
3. Generation of Employment
4. Balanced Regional Development
5. Improvement in Living Standards
6. Economic Independence
7. Backward and Forward Linkages
8. Inspire Others towards Entrepreneurship
9. Create Knowledge Spillovers
10. Augment the Number of Enterprises
Objectives of enterpreneurs in economic development
1. Encourage Capital Formation
Under economic development, capital formation shows the
role of entrepreneurship in economic development. It is the
result of net investment, which also increases the rate of
saving, and investment is also growing in the rate of saving,
which is of great significance. During encouragement of capital
formation it shows role of entrepreneur in economic growth.
2. Employment Creation
In economic growth role of the entrepreneur is to create
employment. Under this, employment occurs when people are
without work and seeking work. It is a situation where people
who are willing and capable of working are unable to find
unemployment. It is the role of entrepreneurship in economy.
3. Creation of Job Opportunities
A new business start, and small and large-scale
entrepreneurship start. Entrepreneurs set up more and more
units. So, small and large-scale job opportunities are helpful
for other employees as the role of entrepreneurship in
economic development.
4. Creating Employment Opportunities in the Future
When enterprises grow, and firms start and grow, creating
jobs has to continue as they provide many more direct and
indirect employment opportunities.
5. Provide Immediate Employment
Entrepreneurs provide immediate large-scale employment to
the unemployed. As it is a chronic problem in underdeveloped
nations. That shows the role of entrepreneurship in economic
development.
6. Economic Independence
Entrepreneurship is important for national self-reliance. In
economic growth role of entrepreneur is to provide economic
independence. Industrialists helped manufacture substitutes
for imported products. Also, in reducing dependence on
foreign countries. Economic independence shows the role of
entrepreneur in economic development. However, it is the
role of entrepreneurship in economic development. It does
not emerge and grows spontaneously.
7. Overall Development of Area
Entrepreneurs multiplies their entrepreneurial activities, thus
creating an environment and the area’s overall development.
8. Create New Firm and Business
The creation of new firms and businesses is important
because these new firms contribute to the economy. These
can contribute through benefits. The creation of new firms
and businesses
is the main contribution of entrepreneurship in economic
development. These are production process innovations,
increased revenue and job opportunities. However, the role of
entrepreneurship in economic development is vital.
9. Elimination of Poverty
One of the significant causes of poverty is unemployment.
Since entrepreneurship is engaged with employment
generation, then, by extension, the employment era will
reduce poverty. Wealth created will reduce poverty by
empowering the citizens and increasing their access to the
necessities of life.
10. Promoted country exports
Entrepreneurs produce quality goods and services at lower
prices. Also, export high amounts of foreign exchange from
exports.
11. Community Development
Economic development does not always translate into
community development. However, it requires infrastructure
for education and infrastructure needed for education and
training, healthcare, and other public services.
12. Reduction in Crime Rate
Employment generation through entrepreneurial activities will
reduce the crime rate. It is firm that unemployment is
responsible to a large extent for the level of crimes.
13. Raising the Standard of Living
Entrepreneurship by creating productive organisation helps
make a wide variety of goods and services available to society
at lower prices. It improves their standard of living. An
increase in the people’s standard of living is a characteristic
feature of the country’s economic development. Therefore, an
increase in standards shows the role of entrepreneurship in
economic development. Further, Entrepreneurship through job
and wealth creation raises people’s standard of living.
14. Optimism Utilisation of Resources
Wealth is created and stimulates the creation of new firms. It
results in optimum use of economic resources, such as
labour, capital and technology, to the fullest extent.
15. Rural Development and Reduction in Migration
Entrepreneurs stipulate rural development by setting up
businesses in rural areas. Further, rural entrepreneurial
activity by generating employment removes urban-rural
shortcoming in income and economic opportunities. Thus, it
decreases the movement of rural area people to urban areas.
16. Increase in GNP and PCI
They explore and exploit opportunities, encourage effective
resource mobilization, bring in new products and services
and develop markets for the economy’s growth. In this way,
the role of entrepreneurship in economic development helps
increase the gross national product and per capita income of
the people in a country. An increase in the rate of gross
national product and per capita income of the people in a
country is a precondition of rapid economic growth.
17. Wealth Creation and Sharing
By establishing the business entity, entrepreneurs invest their
own resources and attract capital (in the form of debt, equity,
etc.) from investors, lenders and the public. This mobilizes
public wealth and allows people to benefit from the success
of entrepreneurs and growing businesses. This kind of pooled
capital that results in wealth creation and distribution is one
of the basic imperatives and goals of economic development.
Problems faced by entrepreneurs
1. Selecting a service or product
An entrepreneur may have the skills and passion to start a
company, but one important factor in starting a business is
deciding what to sell. To start, they may identify a demand in
their community they could meet. A marketing firm or
freelance researcher may help them conduct market research
to discover what needs there are and which ones they have the
resources to address. For example, an entrepreneur may learn
that the people in their community drive out of town to get
massages, so they know there is a local demand for a spa that
they could fill.
2. Developing a sales strategy
Though an entrepreneur may recognize an opportunity in a
certain community, they might also research the best way to
sell to that community. They may hire a professional to create a
marketing plan or make one themselves. To do this, they can
assess who their target audience is and what strategy might
best reach them. For example, if an entrepreneur opens a
business in a rural community where they know many people
listen to the radio, they may develop a digital ad to broadcast
locally.
3. Establishing starting funds
For entrepreneurs who start with lower capital, there are ways
to earn funding to get started. They may begin with a
traditional bank loan or a federal small business loan. If they
plan to provide a product or service that they know has
significant demand already, they might start a fundraising
campaign. For entrepreneurs who would rather use a self-
fueled growth model, they may start by targeting a small
audience and slowly building to serve larger client bases.
4. Maintaining a budget
Because running a company can be unpredictable, an
entrepreneur can stay prepared by carefully maintaining a
budget. They may do this by prioritizing efficient marketing
strategies and allocating the rest according to their unique
needs. Assessing which expenses are necessary may help
entrepreneurs adjust their funds to better prepare for changes.
For example, they may observe that there is a more affordable
manufacturer they can use and reallocate those savings to
address higher utility costs.
5. Sustaining revenue
It's important for entrepreneurs to manage their organization's
money carefully to account for any potential delay in invoice
payments. Aside from budgeting, entrepreneurs may charge a
down payment to ensure they can afford expenses until they
receive full payment. By sending invoices as early as possible
and requesting payment as soon as they complete projects,
entrepreneurs can secure funding to keep operations running
efficiently.
7. Managing employees
As the creators and leaders of an organization, entrepreneurs
guide their employees on how to best carry out the
organization's goals. They can achieve this by developing clear,
detailed instructions for each role. When an entrepreneur
effectively communicates the goals of the organization,
employees may better understand what they expect and what
they're working toward. For example, if the founder of a clean
water initiative tells employees the story of why they started
the company, they may feel more inspired to work toward the
common goal of providing clean water.
8. Expanding the business
After an entrepreneur establishes their business, they may
reach a level of success where they want to expand. This stage
of managing a business entails many considerations, including
figuring out a way to address greater demand, researching new
partners and reassessing their role in the company. An
entrepreneur may revise existing processes to better meet the
company's needs. For example, if a consulting firm uses
software built for a smaller client list, they may upgrade to one
that betters suits a wider client base.
9. Managing time
Starting a new business and managing it creates many periodic
tasks, so entrepreneurs may create deadlines to help with
prioritizing their obligations. Because their role can encompass
many responsibilities, entrepreneurs have several approaches
they can take to manage time. One strategy they can use is
creating goals for themselves and others in the organization.
They may assess which tasks are absolutely necessary and
which they can delegate.
Strategies for entrepreneurship development
1. Understanding Entrepreneurship Development
Entrepreneurship development encompasses various activities
and initiatives aimed at nurturing the entrepreneurial mindset,
skills, and capabilities. It involves creating an enabling
environment that encourages individuals to identify and seize
business opportunities, take risks, and innovate.
By understanding the fundamental principles of
entrepreneurship development, policymakers, organizations,
and aspiring entrepreneurs can effectively navigate the
complex landscape of entrepreneurship.
2. Creating a Supportive Ecosystem
A supportive ecosystem is crucial for fostering
entrepreneurship. It involves the collaboration of various
stakeholders, including governments, educational institutions,
industry associations, incubators, and accelerators.
By providing infrastructure, mentorship, networking
opportunities, and access to markets, these entities create an
environment conducive to entrepreneurial success. Policies
that simplify business registration processes, reduce
bureaucratic hurdles, and provide financial incentives also
contribute to a supportive ecosystem.
3. Promoting Innovation and Creativity
Innovation and creativity are at the core of successful
entrepreneurship. Encouraging a culture of innovation involves
creating platforms for knowledge sharing, promoting research
and development, and fostering collaboration between
academia and industry.
Governments can introduce policies that protect intellectual
property rights, provide grants and funding for research and
development, and facilitate technology transfer to promote
innovation-driven entrepreneurship.
4. Enhancing Access to Capital and Resources
Access to capital and resources is a critical factor in
entrepreneurship development. Financial institutions, venture
capitalists, angel investors, and crowdfunding platforms play a
vital role in providing funding for startups and small businesses.
Governments can support entrepreneurship by establishing
funding schemes, venture capital funds, and angel investor
networks. Additionally, providing access to affordable
workspace, equipment, technology, and skilled workforce
enhances the resource availability for entrepreneurs.
5. Developing Entrepreneurial Skills and Mindset
Entrepreneurial skills and mindset are essential for
entrepreneurial success. Educational institutions and training
programs can offer entrepreneurship courses and workshops to
equip aspiring entrepreneurs with the necessary skills in areas
such as business planning, marketing, finance, and leadership.
Developing resilience, adaptability, and a growth mindset are
equally important in navigating the challenges and
uncertainties of entrepreneurship.
Indian enterpeneurs that contributed in Indian
economy
Jamsetji Tata & Ratan Tata: The Innovation Drivers
We all know of the Tata Group and Ratan Tata, a man of simple
means with a company worth billions. But it was JamsetJi Tata,
the entrepreneur who started the Tata Group as a private
trading firm back in 1868. The group has since been a part of
many firsts in the nation. It commissioned the first-ever luxury
hotel in India- Taj Mahal Palace & Tower in 1902. It was
Jamsetji who envisioned setting up an institution that would
harness the finest minds of the nation. Even though his dream
did not materialize in his lifetime, his successors carried on
with his dream which gave birth to one of the finest institutes
in India- the Indian Institue of Science (IISc). Jamsetji was also
the original mind who envisioned building a hydroelectric plant
(Tata Powers), and an ironworks company (Tata Steel), which
were brought to fruition by his successors Sir Dorab Tata, Sir
Nowroji Saklatwala, Jahangir Ratanji Dadabhoy (JDR) Tata, and
Ratan Tata (present). Together they have taken the group to
unattainable heights one sector at a time, and have contributed
to the growth of the Indian economy.
Today, the Tata Group is known for its innovative solutions
across sectors. The company is inducing innovation, not only in
its solutions but also in the way it operates. To nurture young
ideas, the Tata group is employing innovative means such as
gamified innovation challenges and hackathons to reach out to
the top talent in the country. Tata has also initiated a
unique 'One Tata' platform called the Tata Innovista, for
recognizing and promoting innovations of the Tata companies
at the Group level.
Dhirubhai Ambani: The Pioneer
The Indian businessman who went from selling fried snacks to
pilgrims in Gujarat to being a gas station attendant, to
eventually founding Reliance Industries that we know of today,
is definitely worth a mention on this list. He followed a simple
philosophy- "Think big. Think differently. Think fast. Think
ahead". It was Dhirubhai's innovative vision and risk-taking
capacity that led to Reliance Industries becoming one of the
largest Indian private companies in the world. Today his sons,
Anil Ambani and Mukesh Ambani (who features on the list of
the richest businessmen in the world) are taking their father’s
legacy forward. Having bold ambitions for India, Reliance
Industries (led by Mukesh Ambani) intends to create an
innovation agenda that is even bolder, ensuring that the future
wave of growth shall remain innovation-led.
JC Mahindra & KC Mahindra: The Men Of Steel
The foundation for Mahindra & Mahindra was laid in October
1945 by the brothers Jagdish Chandra Mahindra & Kailash
Chandra Mahindra. They started this business as a steel
trading company with suppliers from the UK and turned it into
a mega-sectoral business for post-independent India. In 1947,
they became the manufacturers of Willy Jeeps and introduced
the Indian market to its first-ever 4-wheel off-roader, CJ3A. The
company got listed on the Bombay Stock Exchange in 1955,
from where it began its advent towards the future.
Today, Mahindra is the largest tractor manufacturer and seller
in India, catering to the needs of thousands of farmers across
the nation. The company encompasses multiple sectors and is
one of the biggest Indian conglomerates with a focus on
sustainable and inclusive economic growth.
Jamnalal Bajaj & Rahul Bajaj: The 'Two-Wheels' Of Success
Back in 1926, a freedom fighter, philanthropist, and Mahatma
Gandhi’s confidante, Jamnalal Bajaj started what we know of
as the Baja Group today. Jamnalal followed the Gandhian
philosophy and sewed it into his sugar manufacturing business
in Lakhimpur Kheri, Uttar Pradesh. He was a strong propagator
of village industries, the Khadi movement, and the removal of
untouchability. It was the patriotic belief and philosophy which
helped his business grow along with the Indian economy. He
was succeeded by his son Kamalnayan Bajaj, a Cambridge
graduate who diversified the business into two-wheeler, three-
wheeler, cement, and other sectors. And then it was Rahul
Bajaj, the pioneer who managed to successfully navigate the
License Raj era and make the middle-class dream of owning a
two-wheeler come true for millions.
Rahul watered the seeds sown by his forefathers and carried
their Gandhian legacy forward. In a time when most businesses
were focused on churning out the biggest profits, Rahul kept
his two-wheelers affordable and believed in providing his
customers with quality products at competitive prices. Today
Bajaj has a strong presence in automobiles, finance, home
appliances, electrical, iron & steel, and insurance sectors of the
Indian economy.
Ardeshir Godrej: The Locksmith Of India
Born in 1868, this Parsi-Zoroastrian boy laid the foundation of
one of the biggest Indian consumer goods companies, in pre-
independent India. No one could have guessed that Ardeshir
Godrej would revolutionize the Indian economy as he did.
A lawyer by education, Ardeshir went a completely different
route when he decided to build his own business. And even
though his first venture of making surgical equipment failed
miserably, he marched on and gave ‘Godrej’ to the world. He is
the man behind many firsts for the Indian market.
What started as a lock-making firm, became the creator of
India’s first ever safe in 1902. He soon ventured into the soap
and vegetable oil manufacturing industry along with his
brother and produced the world’s first-ever vegetable soap.
The rest as they say is history. Over the years, Godrej Group of
Companies has grown leaps and bounds with each successor
taking the business farther than before. Today, Godrej is a
multi-sectoral conglomerate operating in consumer products,
food products, real estate, electrical appliances, and many
other sectors with multiple subsidiaries under its banner.
Sachin Bansal & Binny Bansal: The New Age Entrepreneurs
Flipkart is the first homegrown e-commerce platform that
inspired many new-age entrepreneurs to take action on their
dreams. Its contribution and consequently Sachin & Binny’s
efforts to bring about a new change in the Indian economy are
monumental. Even though the founders have gone their
separate ways, their innovative business idea is still serving
millions of Indians one delivery at a time.