Example Economics Essay.HOW ENTREPRENEURS IMPACT AN ECONOMY

Example Economics Essay.HOW ENTREPRENEURS IMPACT AN ECONOMY
As economies continue to integrate due to globalisation and formally closed economies like India and China march toward total liberalisation, entrepreneurship is on the increase. A close analysis of developed and industrialised economies indicates a common denominator that stands out amongst all of them, which is the important role played by entrepreneurship and entrepreneurs in such economies. This phenomenon has proved to us that if an economy is to develop fully, entrepreneurship should be allowed to flourish. Therefore it is the objective of this paper to critically analyse the impact of entrepreneurs in any given economy. In this paper the writer will identify and discuss the many benefits afforded to an economy through entrepreneurs and entrepreneurship and the disadvantages of the same and draw conclusions on the overall impact of the entrepreneurs.
Individuals often resort to entrepreneurship for one of the following reasons, because they find a market niche and have the solution to profit from such niche, because they have been unable to find suitable employment or a suitable means of income and therefore have resorted to using their creativity to generate an income for themselves, or because they have the technological know-how and the financial resources (or able to source all of the above) necessary to generate income by satisfying a need in the marketplace. Irrespective of which of the above led an individual to become an entrepreneur it is clear that innovation and creativity is the driving factor and therefore it can be stated that the biggest impact of entrepreneurs to an economy is the innovative contribution that they make.

Job Creation

As stated in the previous section one of the main reasons that individuals tend to become entrepreneurs is because they are unable to find suitable jobs. As a result, by being enterprising, creative and finding a market niche, not only are they able to generate an income for themselves but also to employ other individuals in their business operations. Therefore one of the most positive impacts that entrepreneurs make on an economy is job creation and the reduction of unemployment levels within that economy. In developed countries we see that almost 40 – 50% of the workforce are employed in small and medium scale business enterprises that were started up by very enterprising individuals. Likewise in countries like India we see that millions of women have been able to pull their families out of poverty through self employment and entrepreneurship that has been made possible by different Non Governmental Organisations and due to the availability of such resources through micro finance etc. Africa is another good example of small scale entrepreneurs helping to reduce poverty and help many avoid destitution. Therefore based on everything that has been stated above it is apparent that entrepreneurs can cause a great degree of impact on an economy through job creation and income generation.

Increased Competition

Another positive impact of entrepreneurship on an economy is the increasing level of competition in that economy as new entrepreneurs join the fray in existing domestic markets. While one may venture to say that this will only lead to market saturation, the upside of such a phenomenon is that it causes all the players in the market to re-evaluate their operational capabilities, increase value addition, lower costs and become more efficient. Thus it can be stated that competition reduces likelihood of monopolies and oligopolies in the marketplace and is beneficial to the customer and the economy as a whole.

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