The role of entrepreneur and entrepreneurship in economic development can be highlighted with the help of the following functions performed by entrepreneurs:
i) Generating Income- Economic development of any economy is related to the increase in its GDP. As an entrepreneur takes up production activities, he/she directly contributes to the income.
ii) Forming Capital- The GDP of an economy is directly related to the rate of capital formation. An entrepreneur invests his/her own savings and mobilises the savings of others. Thus, an entrepreneur contributes to the process of capital formation.
iii) Generating Employment- By setting up a business, an entrepreneur provides employment directly or indirectly. He/she provides employment to labourers for building a factory or hires people who can work in the production process.
iv) Creating Business Linkages- An entrepreneur helps in creating a chain of business linkages. An enterprise provides opportunities to both the suppliers of the raw materials and the marketers who will be selling the final product.
v) Increasing Efficiency- An entrepreneur improves economic efficiency by avoiding the wastage of resources. He/she focuses on the optimisation of resources and aims at producing greater output from the available inputs. He/she also works on the technological aspect to contribute to the productivity.
vi) Increasing the Range of Economic Activities- Entrepreneurs always look out for fresh areas to invest their savings or to start up a new business. By doing so, they help in increasing the scale of economic development.
