How does Entrepreneurship contribute to economic development?.

How does Entrepreneurship contribute to economic development?.

1. Generation of employment
2. Capital formation – through production, profits, investments, savings and further
investments
3. Growth of infrastructure- helps to open up infrastructures such as roads, communication,
factories etc boosting economic independence by producing goods that would have
otherwise being imported
4. Provision of essential capital goods such as tools and equipments. Furniture etc
5. General improvement of standards of living by providing goods and services to the
society
6. Growth of industries- entrepreneurship results in growth of industries thus contributing to
industrialization
7. government revenue through taxes taxation
8. Rural development which in effect-Equitable development
9. Reduced rural-urban migrations
10. Entrepreneurship facilitates structural transformation, innovation – driven growth by
Facilitating transformation from traditional agricultural based economy to modern
industrial economy and production for the market.
11. Entrepreneurs are seen as capitalists and therefore facilitate increased savings through
which capital accumulation is stimulated for investment eg
- Entrepreneurs save to start up businesses
- Entrepreneurs save to expand their businesses
- Entrepreneurs save to reduce need for expensive borrowings
- Entrepreneurs save for precautionary reasons.
12. Entrepreneurs provide an environment where human capital is accumulated in the form
of; workers specialized and non-specialized Managers of all levels.
13. The entrepreneurial ability determines the sizes of firms and the general growth of an
economy by; The limitative role and ability to take risks and ability to trigger investments.
14. Entrepreneurship facilitates re-allocation of production factors from less productive areas
to productive areas.
15. They cause an increase in the demand for education of labour
16. Facilitates adoption of improved technology. Through entrepreneurship creation of new
firms through, which
a. Increased production
b. Production for expert market
c. Employments are achievable.
17. Through entrepreneurship need to knowledge accumulation generalization and
commercialization has had to cooperation between researchers and institutions, private firms
(sector) and the government.
18. Through entrepreneurship development and production of;
i) variety of consumer goods
ii) producers goods or intermediate goods has greatly increased hence new products are
bought to the market
iii)Application of new technology and profit multiplication.
19. Through entrepreneurship information if provided on what an economy can be good at
producing which in the context of LDCS information is lacking.
20. Thorough entrepreneurship a vast growth of the private sectors tends to automatically check
the large government sector facilitating to development a greater free market economy.

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sharon kalunda answered the question on March 2, 2019 at 08:21

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