Question

Explain five ways through which entrepreneurs contribute in the economic development of the country

Answer 1

Economic development of the country means a positive growth of the country in terms of per capita income and gross domestic product (GDP). Entrepreneurs contributes in the growth of GDP by the increasing production.

Five ways though through which an entrepreneur contributes in the economic development of the country.

1. Capital formation

Entrepreneur brings capital in the market by investing in a new business and also brings public savings that result in utilization of public's idle money which is important for the economy development of the country.

2. Growth of gross domestic product (GDP)

The entrepreneur uses the resources of the country such as human resource, raw material etc for production which helps in the growth of gross domestic product. High production increases the GDP of the country which is a one of the measure of knowing the economic growth or development.

3. Job creation

Entrepreneurs helps in creating jobs in the country because when an entrepreneur starts a new business he provides job opportunities that results in the reduction of unemployment and also improves the standard of living and enhance the purchasing power which is important for increases overall demand and economic development of the country.

4. Contributes in the reginal economic growth

Entrepreneur invest in the backward areas of the country because government provides subsidies and rebates for investing in such areas which helps in removing the regional disparities and improving regional economic growth and contributes to the overall economy development of the country.

5. Innovation and new technologies

Economic growth and development is linked with technology and innovation that improves efficiency. An entrepreneur uses the new technologies with innovative ways that improves production and quality which is important for economic development of the country.