Entrepreneurs are seen as national assets to be motivated, cultivated, and remunerated to the greatest degree possible. Entrepreneurs develop innovative ideas that provide civilization with a large number of products and services which change the way we work and live. The importance of entrepreneurship can be understood by what it does for society. The benefits they offer are by creating job opportunities, improving standards of living, and contributing to the overall growth of the economy (GDP).
Today, communities across the country are struggling. Workers are worried about their jobs, and the youth is unsure of their future with little prospects of growth. There are no clear solutions but entrepreneurs do come as innovators taking the economy and the society to a state of prosperity and progress.
Who is an Entrepreneur?
An entrepreneur is an action-oriented and determined individual who is all set to strive and achieve goals. They follow certain habits that not only help to keep them healthy but also keep them effective as an entrepreneur.
Entrepreneurship is, therefore, extremely vital for several reasons, from driving innovation and creating jobs to promoting social change. Great entrepreneurs have the ability to change, through their leadership in the way we live and work. If successful, their innovations may improve standards of living, and in addition to creating wealth with entrepreneurial ventures, they also create jobs and contribute to a growing economy.
Importance of Entrepreneurship
Keeping the above in mind, let us take a look at the seven key importance of entrepreneurship:
1. Entrepreneurs are Innovators
With the rapid growth in technology, many occupations don’t exist anymore. For instance, remember the elevator attendant or the movie film projectionist?
Entrepreneurs keep a close eye on these changes and take measures to fill the gaps. They understand the negative impact of technological innovations and the loss of certain occupations but they also sense newer opportunities that can be derived from this age of technology.
Consequently, they innovate and create new products.
These new products or services need more employees in the various fields of marketing, HR, finance, operations, etc. Innovators observe consumer problems and find ways to address the same. Their innovation is what creates employment.
2. Entrepreneurs create jobs
The importance of entrepreneurship can be understood by the number of jobs that are created once entrepreneurs launch new businesses. These establishments become the source of job creation.
Entrepreneurs start a business in completely new domains and sectors. Take, for instance, Byju’s – The Learning App. It provides educational content to school students in the form of videos and online tutoring.
As of 2019, the organization has around 8,000 employees and none of these existed until the idea of an online mobile application for providing tutoring and educational classes was started.
Think about the development of the internet. It has made tremendous progress but it also came with its own set of troubles like cyber attacks, where criminals are trying to steal confidential information and rob users. In response to the consumers’ needs, a software company developed security applications that can defend and protect against attacks on websites.
To begin with, the idea was new and distinct but with time, competitors have emerged into the business creating an entirely new industry of cybersecurity. This has resulted in more new jobs for trained software developers.
Entrepreneurs significantly contribute to economic growth. The employees at their firms are seeds planted for growth. These employees earn and spend their income on other businesses, thereby increasing job opportunities in other businesses. This, in turn, enhances the overall quality of life for employees and the people with them.
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3. Entrepreneurs improve the standard of living
The journey of entrepreneurship is dynamic. As they see a problem in the lives of the consumers, they use their creative thinking to identify a solution.
They start a new organization and create employment. When new employees are hired, they are remunerated, and this income is spent in the local economy. This generates an incremental wealth for the population and results in raising the standard of living for all involved.
When a company launches a better product or service, competitors need to match or withdraw themselves from the industry. Increasing competition forces everyone to improve their efficiency and become better at their jobs. They don’t have a choice but to be more productive and live a higher standard of living.
4. Entrepreneurs are Philanthropists
One of the most highlighted importance of entrepreneurship is the nature to give back to the community.
As entrepreneurs earn for themselves and their employees, they get involved in donations and charities.
Infosys is a classic example of philanthropy. Infosys Foundation supports the underprivileged sections of society in education, destitute care, healthcare, culture, and rural development.
Entrepreneurs donate generously to veterans’ groups, homeless shelters, health organizations, and libraries. As a result, the entire economy develops and flourishes. This would not have been possible if entrepreneurs did not start new businesses and did not offer jobs to employees.
5. Entrepreneurs introduce changes in the community
Entrepreneurship benefits the local community and society. The new company hires employees who earn an income to spend at local stores. This generates more business for the store owners. When one business grows, it contributes to the progress of another.
Some business organizations require highly skilled individuals. This creates a demand for schools, intern programs, and workshops that can provide skill training. The community responds to the demand by creating training institutes and everyone in the community advances. The company hires the kind of individuals it requires and the community gets highly educated and trained individuals.
Entrepreneurs make arrangements for organizing food drives, building houses, funding cleanups, and giving to local charities. Some may also contribute to the upliftment of infrastructure in society. This significantly helps in the growth and development of the community.
6. Entrepreneurship leads to economic growth
Entrepreneurship is a process that starts with new businesses making money for civilization. New industries add economic wealth as entrepreneurs invest funds to create new products and services. Venture capitalists and angel investors also provide more capital increasing the number of funds that are put into the growth and success of the organization.
Businesses earn profit and pay taxes; employees pay income tax. The government utilizes this additional income to stimulate the economy and generate better facilities. It leads to an overall increase in the country’s gross domestic product (GDP).
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7. Entrepreneurs support other entrepreneurs
Some entrepreneurs move on to also become mentors and consultants. This is because they have a passion for their business and like to guide aspiring innovators on their path to success.
Seasoned entrepreneurs can share the common mistakes, the obstacles, the usual challenges, and the methods to overcome the same. This allows a newbie to save on time, which would have otherwise been spent on making mistakes out of business immaturity. It also helps in saving money and other crucial resources.
Entrepreneurs can advise on ways to arrange funds – like obtaining loans for entrepreneurship. They establish local groups and communities that can interact with each other, brainstorm ideas, discuss the hurdles of starting a business, hire employees, etc.
The Bottom Line
Entrepreneurs do a lot apart from just identifying and introducing innovative solutions to consumer problems. With their work, the society is benefited in several ways such as creating employment, increasing spending capacity, purchasing supplies from local vendors, raising the standard of living, volunteering for charities and donations, and contributing to the prosperity of other organizations. The importance of entrepreneurship is vast since they create engines that spearhead the economic growth of a country like India.
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