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THE ROLES OF ENTREPRENEURSHIP IN ECONOMIC
DEVELOPMENT OF A COUNTRY
Ibrahim Adekunle AGBOOLA
Dip, B.Sc, NIM, PMP, HRM, M.Sc
Executive Chairman of Bremah Pan African Limited
E-mail: ibrahimagboola01@gmail.com
Abstract
The study tells that the entrepreneur acts as a trigger head to give a spark to
economic activities by his entrepreneurial decisions. He plays a pivotal role not only
in the development of an industrial sector of a country but also in the development of
product and service sector. Entrepreneurs are like gamblers, and like any gambler,
their chances of winning increase if they have the right cards. The role of
entrepreneurship in economic development varies from economy to economy
depending upon its material resources, industrial climate and the responsiveness of
the political system to the entrepreneurial function. Path breaking offerings by
entrepreneurs, in the form of new goods & services, result in new employment, which
can produce a cascading effect or virtuous circle in the economy. If we understand
the benefits and drawbacks, a balanced approach to nurturing entrepreneurship will
result in a positive impact on the economy and society.
Keywords:- Entrepreneurship, Entrepreneur, Economic development.
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Entrepreneurship plays an influential role in the economic growth and standard of living in the
country. As a startup founder or small business owner, you may think that you are simply
working hard to build your own business and provide for yourself and your family. But you are
doing a whole lot more for your local community, state, region, and the country as a whole.
Do you know what the role of entrepreneurship is in the economic development of Nigeria? This
article will enlighten you on the concept of entrepreneurship and its importance in the economic
development of our country.
Due to the current economic downturn in Nigeria, there have been a lot of calls and push for
entrepreneurship. The government, organisations, different individuals, etc. want people to start
their businesses. This is as a result of the importance of entrepreneurship in the economic
development of the nation. Over the years, a high level of entrepreneurship is what has led to the
economic development of many nations we see today. Even the United Nations University
World Institute for Development and Economics Research carried out a project on the role of
entrepreneurship in economic development. Their work was compiled into a book titled
Entrepreneurship and Economic Development.
China is a good example of a nation with an impressive economic development that came about
as a result of the promotion of entrepreneurship among its citizens. Well developed countries are
more interested in entrepreneurs than people in white-collar jobs. In the economy today,
education is being redefined to produce entrepreneurs and not just job seekers. So, the role of
entrepreneurship in the economic development in Nigeria cannot be underestimated especially in
times like this. Before we start listing the roles and advantages of entrepreneurship in Nigeria,
you need to understand what entrepreneurship is about.
WHAT IS ENTREPRENEURSHIP?
The concept of entrepreneurship is poorly understood by many. Most people see it as just
starting a business and making money. But that is not what entrepreneurship is. It is more than
just having a business. It is a special way of life and mindset in which people are innovative and
try to solve some particular problems while also creating value in society. Entrepreneurship has
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been described as the driving force of decentralising and restructuring an economy while moving
it towards a market economic process.
ENTREPRENEUR MEANING
The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering
economic growth and development.
The entrepreneur acts as a trigger head to give a spark to economic activities through his
entrepreneurial decisions. He plays a pivotal role not only in the development of the industrial
sector of a country but also in the development of product and service sector. An entrepreneur
can be regarded as a person who has the initiative skill and motivation to set up a business or
enterprise of his own and who always look for high achievements.
He is the catalyst for social change and works for the common good. They look for
opportunities, identifies them and seizes them mainly for economic gains. An action-oriented
entrepreneur is a highly calculative individual who is always willing to undertake risks to
achieve their goals. An entrepreneur supplies risk capital as a risk-taker, and monitors and
controls the business activities. The entrepreneur is usually a sole proprietor, a partner, or the one
who owns the majority of shares in an incorporated venture. According to economist Joseph
Alois Schumpeter (1883-1950), “entrepreneurs are not necessarily motivated by profit but regard
it as a standard for measuring achievement or success.”
So now that we understand the concept of entrepreneurship and entrepreneur, let us move further
and look at the roles of entrepreneurship in the economic development of Nigeria, in particular.
WHAT ARE THE ROLES OF ENTREPRENEURSHIP IN NIGERIA?
Entrepreneurship in Nigeria has helped the economy of the country over the years in a lot of
ways. Let us take a look at some of the most important roles of entrepreneurship in the economic
development of our country.
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1. Creation of job opportunities Entrepreneurship creates job opportunities, first for the
entrepreneurs. However, entrepreneurs are referred to as job creators as well, because when
they start a business for themselves they create jobs for other people. Once more of these
businesses hire people, they reduce the unemployment rate in the country.
2. Development of Small and Medium-sized Enterprises Entrepreneurship in a country
promotes and gives strength to Small and Medium-sized Enterprises (SMEs). The level of
entrepreneurship development in a nation is determined by the number of Small and Mediumsized Enterprises (SMEs). The more SMEs a country has, the more likely it will attain progress.
3. Increase in Gross Domestic Product (GDP) and Per Capita Income Gross Domestic
Product is known as the total value of all the goods and services that are produced by a
country in one year.
Per capita income is the average income earned per citizen or resident of a geographical region in
one year. Per capita income is calculated by dividing the total income of a geographical area by
the population. Entrepreneurs make use of the resources in a country to produce more goods and
services and added value. This will, in turn, increase the Gross Domestic Product of the country.
Also, SMEs create employment income for people, thereby accounting for an increase in the per
capita income of Nigeria as a country. Growth in the Gross Domestic Product (GDP) and a high
per capita income are strong indices of economic development of a country.
4. Wealth creation and distribution
Through the creation of business entities, wealth is mobilized and distributed by entrepreneurs.
The public will benefit from the success and wealth of entrepreneurs in Nigeria. As businesses
grow and expand, it allows for more investors to come into the market with their ideas to
improve the goods and services and make them available at an affordable rate. The more capital
and resources are being pooled into generating product and services, the more entrepreneurs,
employees, and the public will benefit from it. Wealth is created for the entrepreneurs and also
distributed to the public in the form of employment, goods, and services.
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5. Improvement of the standard of living
The standard of living of a country is usually determined by the per capita income of the country.
It is the amount of wealth, goods, and services available to people, especially of the lower
socioeconomic class. Entrepreneurship through Small and Medium-sized Enterprises will
provide more employment income for Nigerians. As explained above, this will increase the
average per capita income of Nigeria and as a result improve the standard of living. Also,
innovative ideas of entrepreneurs who create wealth, goods and services that improve the lives of
the people in the country.
6 Balanced Regional Developments.
Entrepreneurs setting up new businesses and industrial units help with regional development by
locating in less developed and backward areas. The growth of industries and business in these
areas leads to infrastructure improvements like better roads and rail links, airports, stable
electricity and water supply, schools, hospitals, shopping malls and other public and private
services that would not otherwise be available.
7. Exports
Any growing business will eventually want to get started with exports to expand their business
to foreign markets. This is an important ingredient of economic development since it provides
access to bigger markets, and leads to currency inflows and access to the latest cutting-edge
technologies and processes being used in more developed foreign markets. Another key benefit
is that this expansion leads to more stable business revenue during economic downturns in the
local economy.
8. Creating innovation
An entrepreneur is a person who always looks for changes. Apart from combining the factors of
production, he also introduces new ideas and a new combination of factors. He always tries to
introduce the newer and newer technique of production of goods and services. An entrepreneur
brings economic development through innovation.
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9. Induces Backward and Forward Linkages
Entrepreneurs like to work in an environment of change and try to maximize profits by
innovation. When an enterprise is established following the changing technology, it induces
backwards and forwards linkages which stimulate the process of economic development in the
country.
10. Entrepreneurship puts new business ideas into practice
In doing so, it creates jobs that facilitate personal development. With their innovative and
disruptive ideas, entrepreneurs can tackle social problems too. It’s a worthy pursuit to consider,
but if it’s not for you see how to pass down its principles to the next generation and enrol in How
to Encourage and Teach Our Children Thus, it is clear that entrepreneurship catalyzes economic
development. On the whole, the role of entrepreneurship in the economic development of a
country can best be put as “an economy is the effect for which entrepreneurship is the cause”
Conclusion
Paradoxically, a significantly high number of entrepreneurs may lead to fierce competition and
loss of career choices for individuals. With too many entrepreneurs, levels of aspirations usually
rise. Owning to the variability of success in entrepreneurial ventures, the scenario of having too
many entrepreneurs may also lead to income inequalities, making citizens more – not less –
unhappy. However, the interesting interaction of entrepreneurship and economic development
has vital inputs and inferences for policymakers, development institutes, business owners,
change agents and charitable donors. If we understand the benefits and drawbacks, a balanced
approach to nurturing entrepreneurship will result in a positive impact on the economy and
society. Entrepreneurship puts new business ideas into practice. In doing so, it creates jobs that
facilitate personal development. With their innovative and disruptive ideas, entrepreneurs can
tackle social problems too. It’s a worthy pursuit to consider, but if it’s not for you, see how to
pass down its principles to the next generation and enrol in How to Encourage and Teach Our
Children Thus, it is clear that entrepreneurship catalyzes economic development. On the whole,
the role of entrepreneurship in the economic development of a country can best be put as “an
economy is the effect for which entrepreneurship is the cause”
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References
http://www.preservearticles.com/2011011433 26/role-of-an-entrepreneur-ineconomicdevelopment.html http://www.indiastudychannel.com/resources/ 93451-Roleentrepreneurship-economicdevelopment.aspx http://study.com/academy/lesson/what-isanentrepreneur-definition-characteristicsexamples.html
http://www.yourarticlelibrary.com/essay/roleof-entrepreneurship-in-economicdevelopment/40658
https://www.legit.ng/1127213-role-entrepreneurship-economic-development-nigeria.html
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