Role of Entrepreneurship in Economic Development
As mentioned earlier, an economy is the effect for which entrepreneurship is the cause. The relevance of entrepreneurship to socio-economic gain of a country like India can be imbued with multiplicity of justifications. For example, entrepreneurship contributes to:
1. Establishment of Tiny, Micro and Small Enterprises
2. Generation of Employment and Wage
3. Optimum Use of Human and Natural Resources
4. Creation of National Wealth
5. Removal of Poverty
6. Building Enterprising Personality and Society
A brief mention of each of these is as follows:
1. Establishment of Tiny, Micro, and Small Enterprises: Entrepreneurship gets its expression in the form of establishment of small-scale enterprises. That's why entrepreneurship and small-scale enterprises are used as synonym) Industrial history bears evidence to the fact that small-scale enterprises serve as nursery and seedbed for industrial and economic development of a country. In India, small-scale enterprises form around 90% of total industrial enterprises Small enterprises over the period become medium and large and multi-national enterprises. In other words, small enterprises form a springboard from which large firms leap. Today's large-scale enterprises like Reliance Industries Ltd. started with small-scale even with tiny size only. In India itself, the industrially developed states like Gujarat and Maharashtra have larger number of small, medium and large scale enterprises than backward and less industrially developed states.
2. Generation of Employment and Wages: One of the characteristics of small- scale enterprises is that these are labour-intensive and, thus, create more employment per unit of capital employed.J According to P. C. Mahalnobis, with any given investment, employment possibilities in small-scale industries is around eight times greater in comparison with corresponding medium and large-scale industries. Small- scale industries also have either no or very short gestation period. Thus, these generate immediate and large-scale employment. To quote, around 80 percent of industrial employment is generated in small sector only. Therefore, small enterprises are found as effective instruments in solving the unemployment problem in a labour surplus economy like India.
3. Optimum Use of Human and Natural Resources: Small-scale enterprises generally use manpower skill and resources locally available) Thus, entrepreneurship helps mop up the latent entrepreneurial talent and local resources-both human and natural-which otherwise remain idle and unutilized. In this way, development of entrepreneurship helps promote dispersal of industrial activity to rural, semi-urban, and backward areas of the country. This, in turn, promotes balanced regional development in the country.
4. Creation of National Wealth: Entrepreneurship creates entrepreneurs who Create wealth Entrepreneurs as wealth creators play a significant role in the creation of national wealth. For example, small-scale enterprises in India contribute to around 35 percent of the gross value of output in manufacturing sector and around 40 percent of the total exports from the country. As such, small sector has emerged as a dynamic and vibrant sector in the Indian economy.
5. Removal of Poverty: Development of entrepreneurship, or say, self- employment has been considered as one of the most effective instruments in the removal of poverty stalking the land Hence, the Government of India has been assigning ever increasing importance to entrepreneurship development in the country. The result is today India operates the oldest and largest programmes for the development of entrepreneurship and small-scale enterprises in any developing country. Consistent with this, the government has formulated and introduced specific schemes like IRDP, NREP and RLEGP to create self-employment to remove poverty from the country. Self-employment is considered as the best employment for poverty alleviation in India. Mahatama Gandhi considered the development of small-scale enterprise like Khadi and village industries as the only means for having 'village swaraj'.
6. Building Enterprising Personality and Society: Entrepreneurship builds enterprising society. There are evidences to believe that the enterprising culture of the society makes all the difference between the societies and nations as developed and backward. For example, Japan is developed because of the enterprising culture of the Japanese. Similarly, Punjab in India is developed because of the enterprising or achieving culture of the Punjabis. Assam, on the other hand, is less developed because of the 'Lahe Lahe' i. e., slowly-slowly working culture of the Assamese.
The great relevance of entrepreneurship to a country like ours can be best put as:
Entrepreneurship through the development of small-scale enterprises provides immediate large-scale employment, offers a method of ensuring a more equitable distribution of the national income and facilitates an effective mobilization and utilization of resources of capital and skill which might otherwise remain unutilized. Some of the problems of concentration of industries in urban areas tends to create will be avoided by the establishment of small-scale enterprises in the rural and backward areas all over the country. Conversely, the inadequacy or lack of entrepreneurship holds back the economy from taking benefits of whatever advantages it has in terms of resources-be human or natural or both.
Can Entrepreneurship Be Taught or Developed?
There is a substantial amount of disagreement concerning can entrepreneurship be taught or not? Or are entrepreneurs born or made? There are two types of opinions on it. While some people believe that entrepreneurship i.e., the enterprising or risk taking attitude can not be taught, others believe that it is possible. The people who believe that entrepreneurial spirit or trait is inborn, they substantiate it by citing the examples of highly successful entrepreneurs like Henry Ford and Dhirubhai Ambani having no formal entrepreneurial education and training. They hold the view that the nuts and bolts of entrepreneurship can be probably taught, but certainly not the soul of entrepreneurs. In their view, it is just impossible to teach drive, initiative or ingenuity to individuals. The importance of education, they believe, lies in the fact that it plays a significant role in helping to cope with problems entrepreneurs confront. Supporting this view, one professor of entrepreneurship states, "Good ideas (in business) are common, but the people (entrepreneurs) who can implement them are rare."
On the other side, there are people who believe that individuals can be taught to be entrepreneurs. It is with this realization that the conscious efforts were made in India to teach people to become entrepreneurs. In this regard, the famous, 'Kakinada Experiment in Andhra Pradesh done by David C. McClelland in 1964 proved that the entrepreneurial spirit or trait can be developed through proper behavioural experiments among the people especially at a younger age. Following this, the Gujarat Industrial and Investment Corporation (GIIC) conducted the first Entrepreneurship Development Programme (EDP) in India in 1970. It's impact on moulding the candidates, i.e., trainees to become entreprenueurs was found quite encouraging. Encouraged by the Gujarat experience in entrepreneurship development, the Government of India established two national level organizations viz., National Institute for Entrepreneurship and Small Business Development (NIESBUD), New Delhi and Entrepreneurship Development Institute of India( EDI), Ahmedabad, in 1983, to set tone and tempo for entrepreneurship development in India. Since then, there is no looking back in this front. At present, there are 14 Centre for Entrepreneurship Development (CED) or Institute for Entrepreneurship Development (IED), established in the State headquarters, and some 686 central and state government organizations engaged in entrepreneurship development in the country. The evaluation of EDP by the national level evaluation studies have found that the trained entrepreneurs perform better and progress faster than their untrained counterparts. This suggests that entrepreneurship can be taught. Not only that, the introduction of the subject entrepreneurship in the course curricula right from the senior secondary level to the post-graduate level also bears out the fact that entrepreneurship can be taught and, thus, the entrepreneurs can be made. The entrepreneurial education is also aimed at making the entrepreneurship development broad-based in the country.
By now, EDP has emerged as a movement in our country. It is worth noting that India operates the oldest and largest programmes for entrepreneurship development in any developing country. More interestingly, the impact of the Indian EDP movement is borne out by the fact that the Indian model of entrepreneurship development is being adopted by some of the developing countries of Asia and Africa.
.jpg)
