What is the Work of an Entrepreneur?
The entrepreneur is the one who has the ability to develop, organise, and run a business enterprise along with the risk entitled to it in order to make profits. The role of an entrepreneur with relation to the enterprise is as follows:
Employment Generator
An entrepreneur provides employment opportunities to the various segments of the society whether in rural or urban areas.
Idea Creator
An entrepreneur is a fresh source of brainstorming ideas through which he develops multiple product lines.
Capital Creator
An entrepreneur adds capital formation in the business and the economy as well and is responsible for the creation and management of an enterprise.
Contributor in Industry
Boons in the creation of an industry which leads to the development of new markets and industries.
Importance of the Entrepreneur
Importance of an entrepreneur is discussed below:
The more the risks are associated with the business, the more profits it will generate. Every country requires that there must be a huge base of entrepreneurs so that the economy can shift from the phase of developing to the developed stage.
For being developed, there is a need for innovation so that the products remain in huge demand through their excellency. So, entrepreneurship is the sole medium of innovation, and hence, the government provides various means to boost entrepreneurship in the economy.
There is massive unemployment across the country; hence, the entrepreneur plays a major role in curbing these practices.
Commercial Functions of The Entrepreneur
First of all, the entrepreneur must have a business plan.
After drafting the business plan, the entrepreneur must procure the funds available from the various sources of finance available.
Then, he must hire the workforce required for production.
After their hiring, he must plan the production process and acquire all the essential materials necessary for the production process.
In the fifth stage, he must market the products produced in the market and sell them to ultimate consumers.
Government Initiative to Foster Entrepreneurship
The various initiative to strengthen entrepreneurship in India in the form of various schemes are listed below:
Make In India
An initiative by the Modi Government as soon as they came into power In September 2014. To transfer India into the global village by identifying 25 key areas. This scheme also includes the increase of various limits of FDI in various sectors of the economy.
Stand Up India
This scheme was introduced to facilitate financing for SC/ST and women entrepreneurs. The loan could be repaid in 7 years along with a moratorium period of a maximum of 18 months.
Startup India
To generate wealth and employment opportunities, this scheme was introduced. It provides various benefits to the person concerned, such as financial, income tax, registration, tender, and much more.
Skill India
This scheme was started in the year 2015 with the view of training Indians in different job segments. It is also known as the National Skills Development Mission of India and was launched by Prime minister Narendra Modi.
Case Study
After completing IIT, Shubham wants to have his own startup, but he has no idea about the management function of an entrepreneur. He approaches his friend to help him with a management function to be performed. So his friends give him an idea in brief about the management functions to be performed.
Ans: The various management functions that Shubham needs to perform are as follows:
He had to plan for the entire organisation.
After drafting the plan, he needs to develop the organisational structure as per the plans drafted.
Then he needs to recruit the staff as per the needs of the organisation.
Then he needs to monitor the organisation and motivate the employees to achieve the organisational goals.
If there is any deviation in the outcomes planned, he needs to evaluate and control them as per the organisation's needs.
Summary
An entrepreneur is an imagination who fulfils not only his dreams but also the dreams of others through the advancement of technologies. He not only serves as an innovator but also promises luxurious life to the individuals in the society concerned. Hence, he must be encouraged to get a revolution in the world.
FAQs on Role of Entrepreneurs in Economic Growth
1. What is the main role of an entrepreneur in the economic growth of a country?
An entrepreneur plays a pivotal role in economic growth by performing several key functions. They introduce innovation through new products and services, create new markets, and generate employment opportunities. By mobilising capital and investing it into productive ventures, they also contribute significantly to capital formation and the overall wealth of the nation.
2. What are the key commercial functions an entrepreneur must perform to run a successful enterprise?
An entrepreneur performs several crucial commercial functions to ensure a business operates smoothly. These typically include:
- Planning: Developing a comprehensive business plan and strategy.
- Fund Procurement: Securing the necessary capital from various sources of finance.
- Resource Management: Hiring the required workforce and acquiring essential raw materials.
- Production Oversight: Managing the entire production process efficiently.
- Marketing and Sales: Promoting the final products or services and selling them to the target consumers.
3. How do entrepreneurs specifically contribute to job creation in an economy?
Entrepreneurs are major job creators. When they establish a new enterprise, they require manpower, leading to direct employment for various skill levels. This helps reduce unemployment. Furthermore, they create indirect employment by supporting other businesses in their supply chain, such as raw material suppliers, distributors, and service providers, thereby multiplying the positive impact on the job market.
4. In what ways does an entrepreneur act as an innovator and not just a business manager?
While a manager focuses on optimising existing operations, an entrepreneur's role is fundamentally about innovation. They act as innovators by:
- Introducing a completely new product or an improved version of an existing one.
- Developing a new method of production that is more efficient or cost-effective.
- Identifying and opening up a new, untapped market.
- Discovering a new source of supply for raw materials.
5. Why is risk-taking considered a fundamental aspect of an entrepreneur's role in economic growth?
Risk-taking is fundamental because entrepreneurs invest their capital and efforts into new and unproven ideas that have no guarantee of success. This willingness to take risks is what drives innovation and competition in the market. Without entrepreneurs willing to risk failure, an economy would be less dynamic, with fewer new products, services, and solutions to societal problems, leading to slower economic development.
6. How does an entrepreneur's contribution to the economy differ from that of a large, established corporation?
An entrepreneur's contribution often involves disruptive innovation—creating new industries or transforming existing ones. In contrast, large corporations typically focus on incremental improvements to maintain their market position. Entrepreneurs introduce dynamism and challenge the status quo, which forces the entire industry to evolve, while corporations provide stability and scale.
7. Beyond just creating businesses, how does entrepreneurship lead to capital formation for a nation?
Entrepreneurship boosts a nation's capital formation by mobilising the idle savings of the public and channelling them into productive ventures. When an entrepreneur starts a business, they use personal savings or borrow from others, converting these funds into assets like machinery, buildings, and inventory. This process turns dormant capital into active investments, increasing the country's overall productive capacity and generating wealth.
8. Why is promoting entrepreneurship in rural areas crucial for balanced regional development?
Promoting entrepreneurship in rural and underdeveloped areas is crucial because it helps counter the concentration of economic power in cities. It creates local job opportunities, which reduces migration to urban centres. It also ensures the utilisation of local resources and skills, leading to a more equitable distribution of income and reducing regional economic disparities across the country.
9. What are some of the key characteristics of a successful entrepreneur as per the CBSE Commerce syllabus?
A successful entrepreneur typically possesses a combination of key traits. These include having a high degree of self-confidence, being an effective communicator and motivator, possessing deep knowledge of their business, and maintaining integrity. Crucially, they must be comfortable with taking calculated risks and have the resilience to learn from failures.
10. How do government initiatives like 'Startup India' foster the role of entrepreneurs in economic growth?
Government initiatives like 'Startup India' are designed to create a robust ecosystem for entrepreneurship. They provide vital support such as financial benefits through funds, tax exemptions, and easier access to loans. They also simplify the registration process and other legal compliances. By reducing these initial barriers, such schemes encourage more individuals to become entrepreneurs, thus accelerating innovation, job creation, and economic growth.
