Entrepreneurship is the procedure of designing, starting and operating a new business, which is usually a small business and a sole proprietorship. The people who have these chances to plan and start these businesses are known as entrepreneurs. People consider an entrepreneur as a national asset to be refined and remunerated to the highest achievable extent. Entrepreneurs have the capacity to change our lifestyle. When they become successful, their investments may enhance our living standards. Other than opening job opportunities, the importance of entrepreneurship includes creating wealth and conditions for a thriving society.
In simpler terms, entrepreneurship is the ability, capacity and readiness to develop, organize and operate a business venture regardless of the risks that may come with it to make a profit. Most definitions of entrepreneurship concentrate the opening and operating a business, due to the high risks that come with opening a start-up, a significant proportion of start-up businesses do prosper and close down. Some of them close due to lack of capital, bad business decisions, an economic situation, lack of demand in the market or even all of these factors combined.
Entrepreneurship in detail
The nature of a developing economy is not the same as a developed one. The developing economy might be an agronomic nation transitioning into industrialization or one in its infancy in industrialization but with no advanced technology. The world has become a global village because of the industrial revolution and a rapidly developing technology. Due to this, there have been big changes in different aspects of life.
The economic growth of a nation is the result of many human activities. Economic developments is a highly dynamic procedure characterized by the pattern of demand shifts. New products are required appear for the manufacture of products in a country. A developing nation such as Ghana requires competent investors to perceive new opportunities and is willing to bear the risk in exploiting them. A developed economy can uplift the welfare of a nation's circle of poverty and low-income entrepreneurs are able to break this vicious circle.
Entrepreneurs know the importance of studying entrepreneurship since they know it is vital to possess good analytical knowledge about and a business. It helps in adopting reductive precautions to reduce the chances of making mistakes at work. Through entrepreneurship studies, one is able to learn to make evaluative decisions beneficial for the firm. The interesting interaction of entrepreneurship and economic development has important inputs and inferences for business owners, policymakers, change agents, development institutes and charitable donors. If people understand the significance of entrepreneurship, a balanced tactic to nurturing entrepreneurship will impact positively on the economy and society.
The significance of entrepreneurship in an economy
Entrepreneurship or investment is essential for the development of a nation. There are so many reasons why a country should let both local and foreign entrepreneurs invest their capital in various industries. Below are some of the significances of entrepreneurship in Ghana.
1. Entrepreneurs create new businesses
Entrepreneurs are not the only ones who benefit from their enterprises. They give direct and indirect employment for several people in a country. Lack of employment is a big issue in several countries regardless of whether they are developed or not. Through employment, employers are effective in eradicating the chronic problem of unemployment in the country, this in turn creates a path for economic growth of the country.
Entrepreneurial growth is seen as a vehicle for generating employment since it promotes both small and large businesses. Some nations that are more developed can be leaders in entrepreneurial activities. Developing countries such as Ghana can benefit from experiences of developed nations such as Japan, USA and UK.
2. Entrepreneurs add to the income of the nation
Entrepreneurs literally produce new wealth. Existing businesses may stay confined to existing markets and may get high returns. New and improved products, services or technology from investors enable the development of new markets and the creation of new wealth. The cascading impact of higher employment and better earning contribute to an improved national revenue because of taxes and higher government expenditure. The government can use these earnings to invest in other sectors that are struggling and for human capital.
3. Creation of social change
Entrepreneurs offer new goods and services which directly support freedom by lessening dependence on outdated technologies and systems. This in turn improves the quality of life, boosts morale and economic freedom. If people have to stop working and travel far off for their needs, it would greatly affect their ventures, income and productivity. With needs taken care of and resources close by, they are able to concentrate on their jobs without worrying about the basic needs. They devote more time to work, hence bringing about economic development.
4. Economic and community development
Promoting small businesses does not require a lot of capital; meaning they can be started in semi-urban and rural areas. These businesses will create employment in these regions and therefore reduce rural-urban migration. Since a large population of Ghanaians live in the rural areas, the government should put in place measure to encourage entrepreneurship. Small businesses in these areas also use local resources and are convenient to rural and semi-urban areas.
More small businesses and industries in rural areas mean the public will benefit from improved health services, education, transport, entertainment, and others. Building these industries means the development of these areas and therefore promote a balance in regional development. Entrepreneurs often take pride in nurturing entrepreneurial ventures of individuals who share the same interests as them, which is making money. They also offer support to local charities and invest in community projects.
5. Facilitates general development:
Business moguls are like a catalytic agent for transformation which causes a chain reaction. Immediately an enterprise is launched, industrialization begins. Industrialization facilitates the overall growth of a country because of the increase in demand and creating more chances. Entrepreneurs create more investment opportunities hence making people enthusiastic about investment thus an impetus for the development of the region. When people are passionate about investment, they learn about the importance of entrepreneurship skills in any business and try to venture into their own businesses.
6. Ensures balanced economic development
Promoting a small business does not require high investment and can easily be established in less developed regions of a nation. Creating such businesses open up employment opportunities to people who live in these places. Most people live in rural areas so emphasis and effort should be directed to entrepreneurship to control migration to urban centers. Small enterprises use local resources and are best suited to the rural and underdeveloped sector.
The growth of industries and business in these areas lead to a large number of public benefits like road transport, health, education and entertainment among other amenities. Setting up of more industries leads to more development of regions that are not urbanized regions and thus promoting balanced regional development.
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7. Revolution in innovations
For survival and better performance, a business enterprise should be innovative. People believe that smaller organizations have a higher necessity and capability to revolutionize. It is because they do not face challenges imposed by bigger firms in existing technology. Hence they are free and obliged to innovate. Development in entrepreneurship is speeding up the pace of growth of small businesses in Ghana. An increase in the number of these firms will mean more innovations and make the Ghanaian industry able to compete with the rest of the world.
8. Use of resources
The use of resources is another reason for the importance of entrepreneurship in small businesses. These resources which would otherwise just lie around are effectively used when entrepreneurs discover what to do to exploit them economically.
9. Increased competition among other entrepreneurs
Entrepreneurs encourage healthy competition. In addition, as we all know, competition is good for businesses. With the increase in entrepreneurs in the market, fair competition is encouraged, and this ensures that nobody practices monopoly in the market.
10. Better living standards of a nation
Due to their vital role in the society, entrepreneurs are important in achieving a higher rate of economic development for a nation. Entrepreneurs can manufacture more affordable quality products and offer services to the community according to their necessities. When the prices of consumer products become low, buyers are able to purchase more goods. Through this, they can raise the standards of living of the community.
11. Reduces importation by a country
When entrepreneurs invest, they provide products that are lacking in the country or in the market. This in turn reduces the need for importation. The funds which could have been used in imports are directed to some other useful projects of the country.
12. Encourages self-reliance
Entrepreneurs are the pillars of national self-reliance. Sometimes they produce local alternatives to imported products which reduce the dependence on other countries. The goods manufactured can earn foreign exchange for the country through exportation. Therefore, the substitution of importation and promotion of exportation makes the nation self-reliant through economic independence.
The importance of entrepreneurship in small businesses
Small businesses are vital to the success of the nation. The significance of entrepreneurship to the economy is important for small businesses. They provide success stories of entrepreneurs and also meet the demands of local and international businesses. One does not need to set up a business. Being entrepreneurial person nurturing the appropriate skills, initiatives, and attitudes so as to contribute innovatively to an organization is a rather important aspect. This case study gives you some idea of what is involved and how exciting it can be.
Most businesses in Ghana today are small start-ups. Most of them are owned and operated by the the proprietor. Another percentage employs a few workers. They are also an important source of employment. From these small enterprises, tomorrow's big names will probably arise.
Now that you have known what is importance of entrepreneurship to the economy, one can say that entrepreneurship plays an important role in the economics and the welfare of a nation. Most countries, especially underdeveloped countries, should encourage investors.
Entrepreneurship needs a well a coordinated approach due to its horizontal nature. Policies should be put in place to embrace all elements that are influential to promote entrepreneurship. Entrepreneurs in developing countries can take a lesson from what the developed world has experienced and adjust the best practices to their own conditions. If they emulate developed countries, it would help them elude a resource-intensive development phase and base new ventures on solid environmental ground. Entrepreneurs must bear in mind various different national or regional contexts that will have an impact on the success of policy measures and, while recognizing the main concerns or executing policy, Ghana should take its precise perspective into account.
However, the importance of entrepreneurial activities to economic expansion is huge as the essential requirement for an entrepreneurial startup is a new and advanced business idea. New technologies and products manufactured by the businesspersons will at one time make current technologies outdated. The whole process of entrepreneurship goes through a few stages in relation to determining whether to be an entrepreneur; implementing a successful business idea by conducting a feasibility and industry analysis then creating an operative business model. After the drafting of a business model, the next phase would be to implement them to become an entrepreneurial firm. Managing the business to ensure continued development is the final step in the process of entrepreneurship.
Entrepreneurship is, hence, a long journey that needs skills and qualities to implement them successfully. A thorough knowledge of the sector would make the journey smoother for a developing country. Once these nations know the importance of entrepreneurship, they would not hesitate to invest in the sector and encourage its citizens to take up entrepreneurship. Entrepreneurship is important to the economy and development of any nation. The government should put in place policies and guidelines to encourage investment in the country because entrepreneurship does so much to the economy of a nation.
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