Question

1. Do you think the government should provide support to entrepreneurs? Explain your answers.

2. Do you think the government should directly give financial support to entrepreneurs, like direct loans or grants?

3. Do strong IPR protection promote or discourage innovations by entrepreneurs?

Answer 1

1. Do you think the government should provide support to entrepreneurs? Explain your answers.

There are four factors of production in an economic process and entrepreneurs are the one of them that plays a significant role in utilising in an optimal manner to all other factors of production during the production process. It’s role cannot be ignored in an economy. The entrepreneurs use the entire economic agents in an optimal manner. The more the skilled entrepreneur would lead to creation of efficiency among the economic agent and that leads to the formation of efficient and skilled human capital. In a welfare state, most of the welfare activities are undertaken by the government, so in this context the active role of the government paves the way for the efficient human capital formation in an economy. The government should provide support to entrepreneurs for the efficient management of human resources in an economy. The government through different schemes and programmes could augment the skill possess by the entrepreneurs in the country. The higher the efficiency level of the entrepreneurs can utilise the existing resources sustainably and optimally in the economy. Simultaneously it can create employment opportunities in the economy as well.

2. Do you think the government should directly give financial support to entrepreneurs, like direct loans or grants?

Yes, absolutely the government should provide directly financial support to their entrepreneurs. As we have already discussed above the role of entrepreneur in an economy are very much significant as it paves the way for the optimal utilisation of existing resources in an economy. Where there is investment, there must be some return. If government provides financial assistance or support in terms of providing direct short term or long-term loans then they would be able to expand their economic activities in the economy that helps the economy to grow and significantly affects positively to other macro economic variables in the economy. They should be encouraged to extend their economic activities through getting loans easily from the financial institutions. There must be some interest subvention for the small entrepreneurs and priority sector lending norms should be strictly maintained by the monetary institutions in the economy.

3. Do strong IPR protection promote or discourage innovations by entrepreneurs?

The strong IPR protection promotes innovations by entrepreneurs. It gives exclusive ownership right of using ideas or technology by the creator of that technology. It gives the remunerative price for developing the technology or innovation brought out exclusively by that entrepreneur. It reduces the unfair competition in the market. If somebody wants to get access to that ideas or technology then he/she has to pay certain royalty to that entrepreneur to use that. Hence, the IPR promote and encourages innovations by the entrepreneurs.