Development of entrepreneurship may have a positive impact on economic development. Entrepreneurship is proceeded of setting out on your own and starting a business instead of working for someone else in his business. Economic development means a process of upward change whereby the real per capita income of a country increases over a long period of time. Entrepreneurship plays an important role in the economic development of a country in the following ways:
(1) Industrialization: Entrepreneur creates new products, services and new industries through his or her creativity, foresight and innovation. Thus, entrepreneurship plays an important role in industrialization.
(2) Capital formation: Entrepreneurship encourages capital formation by mobilizing the idle saving of the public.
(3) Large-scale employment: Unemployment problem is the root of all socio, economic problems in a country. It helps reduce the unemployment problem of a country.
(4) Balanced regional development: Economic development is quite impossible in any country without balanced regional development. Entrepreneurship plays an important role in balanced regional development.
(5) Balanced distribution of wealth: Entrepreneurship stimulates the equitable distribution of wealth, income and even political power in the interest of the country.
(6) Abolition of a concentration of economic power: Under capitalism, the economic power is concentrated among certain individuals, families and groups. It is a barrier to the overall economic development of a country. Entrepreneurship helps reduce the concentration of economic power.
(7) Proper utilization of resources: The economic development of a country mainly depends upon the proper utilization of resources. Entrepreneurship helps in proper utilization of resources of a country.
(8) Innovation and use of appropriate technology: Entrepreneurs sometimes innovate new technology and collect appropriate technology for the country even from abroad. It plays an important role in the economic development of a country.
(9) Development of backward and forward linkage industry: Entrepreneurship helps in the development of backward and forward linkage industry. It also plays an important role in the economic development of a country.
(10) Development of export trade: Entrepreneurs innovates new products and services. These products and services can be easily exported to various countries.
(11) Increase in national income: Entrepreneurship plays an important role in increasing per capita income which helps in increasing national income.
Finally, we can say that “an economy is the effect for which entrepreneurship is the cause”.
