The Importance of Entrepreneurship in Economic Growth

This assignment delves into the importance of entrepreneurship in economic growth, highlighting its role in driving innovation, creating jobs, and stimulating business development. It discusses various aspects of entrepreneurship, including its complexities, skills required for success, and the impact on local economies. The assignment also references relevant studies and research papers to provide a comprehensive understanding of entrepreneurship's significance.

Entrepreneurship

Table of Contents
INTRODUCTION..........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................6
..........................................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Entrepreneurship is an art to design ,develop ,launch and manages a new business by
addressing all the financial and non financial risks in order to earn adequate amount of profit. An
entrepreneur is an individual who runs the business ,often be a small business initially with the
goal of achieving his or her desired objectives. An objective may vary from organisation to
organisation.
The following study gives you a brief introduction of entrepreneurship ,Richard Branson
the entrepreneur who had started his venture at an early age with a small business
entrepreneurship and then founded Virgin Group,large company venture where 400 companies
were under him ,and further it will explain the different types of entrepreneurship ,skills an
qualities of entrepreneur in detail (Burns, 2016). Present study will explain challenges and
rewards of entrepreneur. Furthermore, it will describe importance of entrepreneurship in
economy and social economy.
MAIN BODY
Entrepreneurship
Entrepreneurship can be described as the process or capacity to develop a new
business ventures by an individual in order to make profits. Entrepreneur's is an individually who
design,launch and manage the business and is liable for the financial risk in the hope of earning
profits. Entrepreneurship also refers to an art or science of innovative thinking and risk taking in
business in order to make profits. In today's era ,the Majority of the market is covered with small
businesses, In fact 99.7% of people in US are small business entrepreneurs.
Types of entrepreneur ventures
Entrepreneurship consists of three types : Small business entrepreneurship,Large
company entrepreneurship and Social entrepreneurship.
Small business entrepreneurship is the process of running a business venture on a small
scale with the aim of earning minimum profit margins in order to fulfils the basic need of their
family. Small business enterprises are owned and operated privately ,with the minimum number
of employees and low sales volume. The entrepreneur Richard Branson had also started his
small business entrepreneurship at the age of 16.
Large company entrepreneurship refers to the companies that runs on a large scale
which offers innovative products that are difference from their existing products. Large company
enterprises have more number of employees with larger resources and are liable to higher risks.
The aim of large company entrepreneurs is to sustain their market share by providing
innovative products through new technologies to their customers in order to earn high profits.

The company have large capital investment as it operates on a large scale and use aggressive
approach. Adaptation of creative ideas and opportunities within the established business
can directly lead the company in improvement of organisation profitability and enhancement of
competency.(Burns, 2016). In this dynamic world ,new technologies and products are
continuously reaching the mind of the customers,companies are required to offer their
customers with innovative products or services in order sustain in the market. For bringing
innovation,many big ventures tied up with the innovative companies to improve its efficiency.
Richard Branson, the founder of the Virgin Group( large company entrepreneur) have more than
400 companies under him.
Social entrepreneurship is an organisation developed and managed by the
entrepreneurs who creates products and services in order to solve social ,cultural and
environmental issue through an innovative way. In toady,s era ,people from all around the world
are implementing and creating innovative, effective and sustainable ways to fight environmental
and social challenges.
The main motive of a social entrepreneur is associated with community development,
poverty alleviation, health care etc. and not to earn profits (Kuratko, 2016). These
entrepreneurship are facilitated by internet, social networking sites and social media websites,
thus these online sites can help the social entrepreneurs to accomplish their shared goals by
collaborating through internet. The social entrepreneurs are ready to bear risks and efforts in
order to create a positive change in the social development.
Skills and qualities of entrepreneurs
An entrepreneur is an individual who builds the business ,bearing the greater amount of
risk compared to any of the employee of the business, risks can include career risk,emotional
risk, financial risk and overall business risks. When it comes to leading a successful business, a
high risk of failure is included. There are various specific skills that are required to be a
successful entrepreneur. An individual should have the ability to manage money, if a person
cannot manage the money ,he or she cannot manage a business(Kirzner, 2015). An
entrepreneur should e curious for the tasks ,for discovering new ideas, revealing new
opportunities,innovation to introduce in his business. Time management is another important
factor which can act as a pillar for the successful business, an entrepreneur should carefully
prioritize the planning ,define the milestones, and execute. Right project management and time
allocation technique can elp the entrepreneur to lead towards progress. Strategic thinking and
figuring out the creative solutions can help the problem to decompose from its core and creates
the opportunities for growth. Application of 80/20 rule and other techniques can help in solving

the problems in lesser time. Communication skills plays a vital role as it builds interaction
between the parters, employees, peers, clients and prospects which decrease the chances of
misunderstanding and also builds a sense of belongingness(Hitt and Duane Ireland, 2017).
Richard Brandon, was embraced with all the mentioned skills and qualities. Richard
Branson, a great entrepreneur was an effective communicator, focused, had great selling and
learning skills with the ability to continuously learning not just entrepreneurial skills but also
valuable life skills .(Kuratko, 2016)
The entrepreneurial process
Entrepreneurship is a refined process and does not take place in overnight. The
entrepreneurial process consists of 5 major steps. These steps are necessary to inculcate in
entrepreneurship to deliver the best value out of the process. The steps are as follows :
Discovery - In this stage, the entrepreneur analyses the internal and external business
environment. It generates ideas of potential business, identifies its strengths and recognizes the
opportunities and threats of the market or industry. The entrepreneur uses its creativity and
innovation to strive for the best business idea. It also involves analyzing the risks and rewards
related to the idea.
Concept Development - It is the stage giving a refined shape to the business idea and
moving forward on it. Concept Development involves developing a business plan by en-
mapping the business idea. It further involves developing the Vision and Mission of the
entrepreneurial concern. This stage defines the objectives the concern need to achieve. It also
requires choosing a business location and acknowledge the need of requirement of patent or
trademark if any.
Resourcing - This ts the stage of identification and acquisition of financial, capital and
human resources in the business venture for the beginning of business operations. Investment
can be raised through angel investors, IPO's, bank loans, etc and can also be borrowed from
family and friends.
Actualization - It is the stage where the operation and utilization of resources takes
place. It indulges to chart a map of day to day operations in a systematic form. This involves
total quality management and delivering more value to customers. Happy customers tend to
support the survival of business concern.
Harvesting - This is the stage where the entrepreneur decides to harvest or divest the
business. It takes decision regarding the growth and development or demise of the concern
depending upon the performance the concern. A sound performance may result in
diversification of product lines.

The understanding of entrepreneurial process is important for efficient working of
business organization(Giudici, Guerini and Rossi-Lamastra, 2018).
Challenges of entrepreneurship
Entrepreneurship is a process of setting of a new business venture. The biggest
challenge in entrepreneurial business is arrangement and utilization of finances as new
ventures face the issue of credibility among public and institutions. They need to struggle
enough to raise initial capital. Another challenge faced by entrepreneurial concern is that of
survival. A venture may or may not be successful over its life cycle. This leads to growth or
demise of entrepreneurial concern. For example : Richard Branson is an entrepreneur who
established his very own first venture at the age of 16 by starting a magazine named as
'Student'. In 1970, he opened a chain of record stores known as Virgin Records. Richard faced
many challenges while establishing his business and was involved in numerous failed business
ventures like virgin cars, virgin brides, virgin cola, etc. Richard considered failures as learning
tools for success(Zulvia and Adrian, 2018).
An entrepreneur cannot work alone, it needs the support of skilled human resources.
Hiring and management of appropriate skilled human resources is also a big challenge.
Delegation of different tasks to different employees as per their skills is also a tough role in
entrepreneurship.
The entrepreneur faces the challenge of unlimited responsibility of the entrepreneurship.
For Example : Richard in his venture was fully responsible for making all decisions. He was the
only force to perform all duties such as documentation, registration, etc. He had to perform
multiple roles due to lack of manpower. He has to respond to changes positively.
The greatest challenge of survival in any entrepreneurial firm depends upon the amount
of competition that is persistent in the market. The entrepreneur has to inculcate a unique factor
in its product or service to get the advantage of competitive edge.
Richard established entrepreneurial venture at a very young age which lacked corporate
exposure and experience in him at that time. This built family pressure on Richard to fulfill their
expectations. Setting of venture requires a lot of formalities and proper documentation.
Bureaucratic policies of country led Richard employ his early days in running from table to table
and from 1 department to another to get necessary permissions and obligations(Thompson and
Van Gelderen, 2018).
Rewards of entrepreneurship
The entrepreneurial concern provides potential for greater financial rewards to the
entrepreneur. Richard Branson has a present net worth US $5.1 billion due to his enduring

commitments towards his vision. He developed a variety of skills and talents over the period
while working for the venture.
Entrepreneurship gives a high degree of accountability and freedom by being your own
boss. The achievements of the venture gives a sense of pride and respect to the entrepreneur
in booming his motivation to grow(Galanakis and Giourka, 2017).
Importance of Entrepreneurship
Entrepreneurship provides financial, social and economic rewards to the entrepreneur as
well as to the society (Why entrepreneurs are essential to the global economy — EY, 2019.). A
successful entrepreneurship develop the potential to generate good returns and provide
substantial wealth for the entrepreneur. Entrepreneurship is not only beneficial to the
entrepreneur but to the society as a whole. Entrepreneurship generate employment
opportunities for society and improve the standard of living of employees. It makes a positive
impact on the society by increase in opportunities and growth of the GDP of nation. Thus
helping in economic development of a country (Dees, 2017).
Illustration 1: importance of entrepreneurship to economic growth
(Source: Daniel Smith, 2010)
Small and medium enterprises contribute to UK economy by stimulating economic
growth and proving employment opportunities to those who may not be employed by larger
corporations. The small businesses accounted for a total of 99.3% among all private sector

businesses. The total employment in small and medium business was 16.3 million which is 60%
of total private sector employment in UK. SME's reaps a total turnover of 2.0 trillion pound,
strengthening the UK economy.
Entrepreneurship helps in increasing the per capita income and purchasing power of
individuals and embrace their economic independence. It promotes balanced regional
development in UK by formation of capital by clubbing the savings and investment of
workforce(Mishra and Zachary, 2015).
CONCLUSION
From the above study,it can be summarized that entrepreneurship comprises of several
complex stages and an entrepreneur needs to invest efforts in order to make business a
success. Whether it is a large ,medium or small enterprise ,every business needs innovations
and creativity. Innovation and creative ideas can grow the business and help the entrepreneur
to attain its goal. Richard Branson reached its goals and became a great entrepreneur by
introducing innovative ideas and creativity to the products or services. For a victorious
business ,an entrepreneur should be embraced with various skills and qualities.

REFERENCES
Books and journals
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Dees, J. G., 2017. 1 The Meaning of Social Entrepreneurship. In Case studies in social
entrepreneurship and sustainability(pp. 34-42). Routledge.
Galanakis, K. and Giourka, P., 2017. Entrepreneurial path: decoupling the complexity of
entrepreneurial process. International Journal of Entrepreneurial Behavior & Research,
23(2). pp.317-335.
Giudici, G., Guerini, M. and Rossi-Lamastra, C., 2018. Reward-based crowdfunding of
entrepreneurial projects: the effect of local altruism and localized social capital on
proponents’ success. Small Business Economics, 50(2).pp.307-324.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship. pp.45-63.
Kirzner, I. M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D. F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Mishra, C. S. and Zachary, R. K., 2015. The theory of entrepreneurship. Entrepreneurship
research journal, 5(4).pp.251-268.
Thompson, N. A. and Van Gelderen, M., 2018, July. Coping with anxiety in the entrepreneurial
process. In Academy of Management Proceedings(Vol. 2018, No. 1, p. 14124). Briarcliff
Manor, NY 10510: Academy of Management.
Zulvia, Y. and Adrian, A., 2018. A Role Of Analysis Core Value, Character And Entrepreneur
Leadership Towards To Successful Entrepreneur.
Online
Daniel Smith. 2010. The Role of Entrepreneurship in Economic Growth. [Online]. Available
through <https://digitalcommons.iwu.edu/cgi/viewcontent.cgi?article=1064&context=uer>
Why entrepreneurs are essential to the global economy — EY. 2019. [Online]. Available through
<https://www.ft.com/content/c1d2736c-1cdc-11e6-a7bc-ee846770ec15>