Question

Describe ANY THREE (3) impacts that entrepreneurial firms have on a society.

Answer 1

Three impacts of entrepreneurial firms on society is as;

1) Creating wealth and capital; entrepreneurs invest their own resources and raise capital from investors and public in order to mobilize their wealth and allow people to benefit from the profits raised by the entrepreneurial firm.Thus wealth creation and distribution which are major goals of economic development are satisfied.

2) Creating employment; entrepreneurs are by nature job creators rather job seekers.For example start up companies which have been set up on minimum capital create output by employing labor and aids in raising employment. Also, attracting foreign companies to produce in home country creates jobs for domestic labor. Thus, satisfying one of the basic goals of economic development.

3) Balanced regional development; Any business firm set up in a less developed area will create direct and indirect jobs, create infrastructure and other facilities which were otherwise would have taken a long time to develop in a backward area. Entrepreneurial firms require to set up infrastructure in different regions to transport their goods effectively which brings better connectivity between different regions and help uplift regional economies.