Entrepreneurship: Meaning & Its Importance

It is interesting to know that India's economic landscape is undergoing a dynamic transformation, driven largely by a surge in entrepreneurship. 60 million small and medium enterprises contribute nearly 40% to the country’s GDP. This indicates that entrepreneurs are not just starting businesses but fuelling India's growth story, creating jobs, and shaping the future of one of the world's fastest-growing economies. The importance of entrepreneurship stimulates economic growth, providing the foundation for new ideas to flourish and transform industries, communities, and lives.

You may be aware that the story of Zomato is a perfect example of entrepreneurial success and innovation in the digital age. It revolutionised the way people order and enjoy food. The entrepreneurs with their innovative ideas significantly transformed the food ordering and delivery dynamics. This exemplifies the power of entrepreneurship to drive innovation and reshape industries.

This blog will try to answer your questions on the role of entrepreneurship and its impact on the country's economic development.

How did the concept of Entrepreneurship evolve?

Entrepreneurship is the ability and readiness to develop, organise, and run a business enterprise, along with any of its uncertainties to make a profit. The most prominent example of entrepreneurship is the starting of new businesses. The economic importance of entrepreneurship relates to land, labour, natural resources, and capital which generate a profit. The entrepreneurial vision is defined by discovery and risk-taking and is an essential part of a nation’s capacity to succeed in an ever-changing and more competitive global marketplace.

What is Entrepreneurship?

The word "entrepreneur" comes from the French word entreprendre, meaning "to undertake."Entrepreneurship is the acumen to recognise an opportunity in the market and manage essential resources like land, labour, capital, etc. to develop, organise, and thereby run a business enterprise. So, entrepreneurship simply put is the starting of a new business which is the backbone of progress and fires innovation and economic growth. Entrepreneurship aims to introduce new ideas to create value in the market besides earning profits which includes dealing with uncertainty and risks to have financial success.

Who is an Entrepreneur?

Here are some attributes of entrepreneurs who think differently and come up with ideas for new things:

• An entrepreneur must have the ability and desire to establish, administer, and succeed in a startup venture
• Can take risks associated with starting and managing a new business to make profits

• Entrepreneurs are sources of new ideas or innovators bringing new inventions or replacing old ideas with new ones

• Entrepreneurship is small or home businesses or involves large multinational companies

What are the types of entrepreneurship that contribute to the development of the economy in India?

There are several forms of entrepreneurship, each with its unique focus and impact as discussed below:

Characteristics of Entrepreneurship:

To be a successful entrepreneur, there are definite characteristics that make the journey more supportive. A few of them are mentioned below:

• Daring to take a risk: A new venture involves taking a considerable amount of risk, so the entrepreneur must be courageous and risk-tolerant when planning a new venture.
• Innovation: Entrepreneurship must have space for innovation and seed an idea to be a foundation for a company that can be run with profits. A new product in the market or an innovative approach to something efficient and economically viable can be the game changer.
• Visionary and Leadership quality: An entrepreneur must have a clear vision to augment the idea with leadership skills for a successful venture. The idea needs to be supported with many resources and employees for it to become a reality. Executive ability is key in driving the success of the company.
• Open-Minded: In business, every circumstance is to be used as an opportunity for the long-term benefit of the company. Understanding the gravity of a situation and making the right decision to steer the course of things for the benefit of the institution is a true leadership skill.
• Open to changes: Adapting to change and being flexible as per a situation is a good quality of an entrepreneur. Be it in a product or any service, the ability to embrace change as and when required is a vital part of entrepreneurship.
• Know your Product: A business owner should have the best knowledge about the product offering and its latest movements in the market. Whether the available product or service meets the current market standards and demands the business owner should know. He should know the right time to change a product or service. Being accountable showcases serious entrepreneurship

What is the Need & Importance of Entrepreneurship?

The importance of entrepreneurship helps us to understand the nature of the work an entrepreneur does. Let us see why entrepreneurship matters. Here are 5 importance of entrepreneurship outlined:

1. Job Creation: With a new business, it means more job opportunities. Not only do businesses create jobs for themselves, but they also hire others, expanding employment prospects across various levels and fostering economic development.
2. Business Innovation: Innovations and new business ideas are key to driving entrepreneurship. There are so many examples of large companies that began as small ventures and grew into major industry players, adding diversity and dynamism to the economy.
3. Driving Innovation: The ability to innovate, develop new products, improve existing ones, and find better ways to meet market demands is a growth metric for entrepreneurship. Enhanced product quality through innovation and technology inclusions make life simpler.
4. Improving Standards of Living: Entrepreneurship promotes developing and offering a variety of products and services to cater to different needs and preferences of customers. Besides job creation, the importance of entrepreneurship contributes to higher living standards by providing access to diverse goods and services.
5. Enhancing Social Welfare: Entrepreneurship is the perfect way to address social inclusion by providing opportunities and improving the livelihoods of underserved groups. Entrepreneurship fosters a sense of connectedness and community.

FAQs

Q1. Who is the father of entrepreneurship?

Ans. Joseph Alois Schumpeter is viewed as the father of entrepreneurship. He introduced the concept of entrepreneurship.

Q2. What are the two main types of entrepreneurship?

Ans. There are many types of entrepreneurship, the two main examples are:

• Small business entrepreneurship
• Large company entrepreneurship

Q3. What are the key concepts of entrepreneurship?

Ans. The 4 key concepts of entrepreneurship are as follows:

• Innovation
• Risk-taking
• Vision
• Organisations

Q4. Why do we need entrepreneurship?

Ans. Entrepreneurship is considered a major driver of economic growth, encouraging transformation, the creation of new markets, innovation, and building wealth.