The entrepreneurs are the most important players in the modern economy. Considered as innovators and risk takers, they provide the engine of economic growth. However, small businesses often fade away under the weight of its own efficiency. As you can see, these entrepreneurs exploit untried technological possibilities in producing a certain commodity that revolutionized the traditional pattern of production and where the environment tends to resist in many ways.
Looking into the macroeconomic instruments of growth and employment, the idea of linking entrepreneurship to economic growth is not new at all. The innovative activities of the small and new firms and entrepreneurship are generally more focused on productive efficiency, which in a lot of ways triggered the introduction of endogenous growth models.
The models of endogenous growth recognized not only the importance of knowledge as an explicit factor that drives economic growth, but also its ability to spill over knowledge for use by third party firms. A simple analysis would make us see that the sharing and automatic spill over of knowledge for use by third party firms does not guarantee the commercialization of knowledge.
The role of entrepreneurship in the commercialization and spill over of knowledge is highly critical to economic growth. Entrepreneurship is about the process of change and the entrepreneurs are the agents of change.
They not only seek and identify profitable opportunities, but also are willing to take the risk in fostering change and innovations. In the theory of the economic development, the role of the entrepreneurs is highly emphasized as the prime cause of economic development.
The rate of business ownership triggered change which explains the economic development in a certain locality. Business ownership at the economy wide level somehow determines the specific region’s structural formation.
It should be viewed as the new push and pull factor in the labor market. Nowadays, there is a rising trend of outsourcing and subcontracting activities to other businesses that highlights the formal and informal freedom to work for others.
The importance of entrepreneurship as an engine of economic and social development is widely recognized by economists and policy makers. The small firms play a very impressive role as agents of change due to their impressive entrepreneurial activity, which stimulated industry evolution.
In fact, they had generated jobs simply from their innovative activity such as the entry and exit of firms and variety of supply. However, with the difference of each region in terms of quantity and quality of entrepreneurial supply, the impact of entrepreneurship on economic growth may vary.
The increased importance of knowledge in all economies has just implied the importance of entrepreneurship on economic performance. Knowledge as an input into the economic activity may be different depending on labor, capital and region.
The secret to maintaining a robust economy is supporting entrepreneurship and innovation. The creativity would allow new firms with new ideas to rise up and compete in the market and even on a global scale.
Just look at China, before, everything was strictly controlled by the state. At present, it permits private ownership to aid innovation as well as keep its economy growing.
In most parts of the world, the entrepreneurs are currently driving creation of small firms rather than the strategists. Apparently, if the government would remain strict with the licenses and entry, these individuals would go somewhere else and pursue their dreams.
If the government hinders entry to control the people and the economy, then they would also hinder the prosperity of the land. With this fast paced world, standing still in a global economy would definitely mean falling behind!
No government would continue to ignore the value of entrepreneurs. Those who resist change will surely slipped into economic stagnation. Many countries are into the race of maintaining industries that can successfully compete in the international market. Right now, the race is hotter than ever!
The magic formula in driving GDP growth is a heavy dose of new technology that can seed industrial growth. Technology becomes either a commodity or obsolete. Take note that commodities don’t spur growth.
New technology has its own economic importance. It should replace the commodities and the obsolete. New industries cannot survive without the new technology.
We often hear about NGOs and governments funding research at universities and other institutions. This is because we need a new technology that can sustain product development and generate success.
Consider the fact that US, UK and other first world country invest more in R&D. This is due to the fact that new technologies make an impact in the market.
The rapid migration of new technologies into products has fueled the industrial development in the past. Even the venture capitalist played a key supporting role in boosting entrepreneurship. Some of these small firms that tuned in to international opportunities played a more complex competitive game to thrive and raise incoming dollars to the economy.
Dreams of success are the sole motivators of budding entrepreneurs. On top of it, a cultural environment can be one of the perfect tools to generate more creative individuals such as the Silicon Valley, which was recognized as the center of the digital revolution in 1990.
The entrepreneurial innovation actually creates the new technology for the new industries. The only thing that the government must do is to give these individuals what they need and they would be driven to create new companies.
Know that at this age, talented young people are drawn to the cultural environment like the Silicon Valley more for what it promised than simple employment. They would want to start their own company and the cultural environment gives them the right training, network and relationships to make it happen.
Entrepreneurship is an occupational choice that makes great contributions to innovation, job creation and economic growth. It can contribute to economic development by facilitating the reallocation of resources from less to more productive uses.
Entrepreneurship is actually about the discovery and exploitation of opportunities by entrepreneurs who are creative in finding ways to achieve their dreams. Clusters of innovations can result in the emergence of technologies such as the ICT with pervasive influence across all sectors of the economy.