The Role of Entrepreneurial Firms in Economic Growth

The provided study focuses on the significance of entrepreneurial firms in the economy, particularly highlighting the importance of entrepreneurs in driving economic growth through transformation, employment, and productivity extension. The assignment emphasizes that entrepreneurs play a crucial role in economic development by leveraging innovative ideas and strategies to enhance local resources and foster economic dynamism.

Running head: ENTREPRENEURSHIP 0
Entrepreneurship and Importance of Growing Firms

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Entrepreneurship and Importance of growing firms
Entrepreneurship is the process of executing the innovative ideas for the betterment of the
society and economy. It is considered as the key for generating wealth, employment and
economic growth; a tool for decreasing poverty and unemployment. Entrepreneurship is
inspired to stimulate growth because it is substitute to unemployment and the direction to
abscond the poverty. The growth of the firms depends on entrepreneur as they make the
innovative strategy and policy to achieve the objectives. Entrepreneurial firms are also very
helpful in regional development by providing direct or indirect support in lifting up the
regional economy. Entrepreneurship is very crucial to any economy. The objectives of this
study are to discuss about the role of entrepreneurship in the economic development
through various ways and the entrepreneurial firm’s potential for growth, relation between
entrepreneurship and management and major objective is that entrepreneurship plays an
important role in the growth of economy and living standard of the country (Toma and
Marinescu, 2014). Entrepreneurship majorly supports the growth of economy by decreasing
the unemployment in the country by providing jobs.
Entrepreneurship is the act of creating a business or businesses with the motive of
generating profit. The meaning of entrepreneurship is very complicated. Entrepreneurship
involves person who take actions for transformation of the world by solving huge problems
that many struggle with each day, or raise something comprehensive that advances society.
Entrepreneurship is the process whereby an individual assess, determine and exploits a
business opportunity (Volery and Mazzarol, 2015). An entrepreneur is the one who take the
idea and execute on it instead of just had an idea stuck in the mind. Entrepreneurship is
about execution of ideas. Entrepreneurs have exceptional ability and extraordinary powers,
their talents include being intelligent, innovative and ambitious. They repeatedly take action
to make sure progress of the world, they observes issues in the business environment and
instantly focuses on thinking about the solution (Drucker, 2014). They want to provide
solutions to the society for day to day problems to improve and take forward their society.
Whether they create jobs for decreasing the unemployment or by creating new products or
also by providing innovative services, they execute their innovative ideas for the world’s
progress. Entrepreneurs are very important in society as they put efforts on their own to
improve society. Entrepreneurs are the ones who create jobs (Naude, 2014). Their motive to
continue their business growth is for creating new jobs, so that it could be helpful in
decreasing unemployment because if the business is growing then they would require more
employees. Entrepreneurs create changes in the society as they see opportunity everywhere
and this talent to see many options in different situations is very censorious. They usually
take risks but that does not mean to be spontaneous with risks of business, so they execute
their ideas with proper planning, strategy, analysing and observing the advantages and
disadvantages. An effective entrepreneur enhances the capacity and potential of decision
makers to make most appropriate decision for business. A business can adopt the
entrepreneurship by looking at some major factors, like; vision, mission and strategy of the
business, culture and structure of the organization, knowledge and creative management,
technology management, effective and ethical leadership, managing the risks and core
competencies (Decker, et al., 2014). They are generally faster to approach the market with
entire new technologies; this is very helpful in taking society forward towards growth.

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Entrepreneurs are helpful in balancing regional development as when they establish their
new business in backward and less developed area; then they are lifting regional economies
in both direct and indirect manner because when the businesses and industries grow in
these areas then this would instigate infrastructure enhancement, such as better roads and
rail links, airports, stable electricity power and water supply, schools, hospitals, shopping
malls and other public and private services that would not otherwise be available. Innovative
mind set and personality is the vital role of an entrepreneur, innovation is the process of
executing the creative ideas and experimentation by launching new products, technologies
and services in a different manner. It represents the firm’s likelihood to attract and hold up
new ideas through creativity and experimentation that would help in developing new
products, services and technologies. Entrepreneurs are supposed to work actively by
implementing their creative ideas productively before their competitors (Galindo and
Mendez, 2014). They are proactive in nature; they set some parameters and make sure that
they are following the same for achieving goals. They know that if something needs to be
done, they should begin it themselves. Entrepreneurs are highly motivated for achievements,
in this a person with the motive of achievement would be an entrepreneur and when highly
motivated actions are implemented then result comes that is entrepreneurship. The
requirement for achievement is the feature for describing economic behaviour or people. In
the hope of achievement, entrepreneurs perform things in different and new ways which are
better. If someone is facing any problem in the organisation then the entrepreneur
individually take the ownership of the work to find the resolution of the problem and fix it in a
better way. They are very dedicated towards their plans, visions and dreams; this kind of
behaviour towards the organisation is very beneficial for whole business. A positive point of
view is necessary for an entrepreneur; one should not get demotivated because of past
failures and disappointments. Entrepreneur is the one who is very talented in monetary
management because without financial support one cannot enhance business for long term,
so they take updates every month and make sure that it is going in the same way in which
they had planned. Risk taking is the key feature of entrepreneurship because without taking
risk or if one is scared of taking risk then they cannot implement or execute their ideas to
achieve their goals (Putta, 2015). Entrepreneurs are recognised by their behaviour of risk
taking as they have this inbuilt nature of taking chance but they take risk with productive and
reflective strategy. They make a well-articulated strategic orientation for future and long term
growth.
Entrepreneurial manager tries to initiate the creative ideas of the organisation with the
effective and efficient use of resources. Entrepreneurs firstly develop the idea and business
concept then raise principal for starting up the business; they hire the employees for
gathering a productive and loyal team. They make innovative strategies to compete with the
competitors, then they implement the strategies and analyse regularly to look if the plan is
effective and productive then they it would help business in growth. Entrepreneurship is
improving the quality of life in the society through balancing the development in economy
and finance (Wright, 2015). Entrepreneurs think with the society’s point of view and analyse
the needs and wants of the society and then plan to fulfil the need of their communities and
societies; this would help an entrepreneur to contribute to the development of society. They
also plan with the motive of creating financial wealth.
Growth of the organisation is major priority of the one who makes the policies. There is
consequently an anxious scrutiny in achieving more knowledge about the policy which helps

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in the growth of firm in better conditions. Growth of the organisation is major priority of the
one who makes the policies. There is consequently an anxious idea in achieving more
knowledge about the policy which helps in the growth of firm in better conditions. High
growth enterprise is defined as; all those enterprises which have their average annualized
growth greater than twenty percentages per annum, over a three-year period. Growth is
determined by the number of employees and by annual turnover (Covin and Wales, 2012).
Entrepreneurship is inspired through the contingency sustained by the innovative and
creative ideas and knowledge created. Entrepreneur is the one who completely utilize their
knowledge for commercialisation in organisational context. Economic performances are
influenced directly from high growth firms through transformation, employment and
productivity extension; on the other hand economic and social outcomes have vaster
consequences.
The successful entrepreneurial firms leave the spill over outcome on the development of
other organisations and also on the regional economic and social consequences. When
entrepreneurs are confused with their innovative ideas then they opt to do experiments for
knowing the possibility of success. Entrepreneurship and experimentation are related to
each other as entrepreneurs firstly experiment their innovative ideas and analyse after some
time about the growth and profit in terms of cash flow, experiments are very helpful as they
provide the information about the possibility of ultimate success. So, entrepreneurs get an
idea of how to continue their business with the help of experiment (Kerr and Rodhes-Kroph,
2014). The impressive innovation and productivity in surviving firms are encouraged by the
high growth firms which are favourably affected on the productivity as the resources of
weaker firms are transferred to stronger firms. High growth organisations contribute to
economic performance. High growth firms are major innovators, these firms are calibre to
perform and procure from victorious innovation.
For the growth of the firm, it is very necessary to be innovative, innovative resources leads
an organisation to grow two times faster. High growth firms are very important for economic
performance, as they help in improving productivity by advancing the relocation of resources
amongst firms and more quick entries and exits within their sectors. On the other hand, by
including internal reformation within individual entrepreneurial firms get support to lift up multi
factor productivity growth by external reformation within sectors. The firms which are growing
very quickly, they are highlighting their contribution to the development of local resources
which support in enhancing the productivity of other local firms (Koryak, et al., 2015).
Entrepreneurial businesses are creative and innovative in nature, entrepreneurial business
has more potential and they are more calibre in terms of growth as compared with small
businesses. Entrepreneurial operations believe in creating their own markets with the help of
their innovative ideas and strategies, hence they are not limited to existing markets. On the
other hand, small business usually performs and operates in an initiated industry and they
are known by their behaviour of operating within certain market; they perform in terms of
particular locality (Lechner and Gudmundsson, 2014).
Entrepreneurial businesses are potential for growth. Entrepreneurial ventures do not only
focus on survival, profit and sales; they usually set some objectives and make strategies to
achieve growth, targets, and better position in market (Smith and Tendai, 2014).
Management and leadership are very prime characteristics for entrepreneurs to achieve
success and growth. It is not mandatory that every managers or leaders are entrepreneur
and in the same manner it is also not important that every entrepreneur have quality of

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management and leadership. In business it is very necessary to be productive enough to
achieve the strategic objective and for this entrepreneurs have to own the talent of both, the
entrepreneur and of the calibre manager. Entrepreneurs and managers both are essential
for the success of the business as both the entrepreneurial and managerial functions are
different from each other; and a business requires the strategies by each individual.
Entrepreneurs usually perform in different manner; they are very innovative in nature so they
think creative and then recognize the opportunities and plan innovative strategies for the
growth of the business. On the other side, management is inclusive of various functions such
as planning, organising, leading and controlling. Entrepreneurs are very much calibre to
discover the best opportunities and establish the business. They also have to manage the
diverse business functions such as accounts, production, marketing, administration, public
relations and human resources. Business cannot be successful only with the innovative
ideas and creative strategies, but it requires proper management to initiate the strategies in
a particular manner to achieve the objectives and growth productively. A successful
entrepreneurial firm is the combination of entrepreneur and manager, as management and
entrepreneurship is related to each other. If an entrepreneur has the calibre of both the
entrepreneur and management then this is the best combination of skills for the growth of
business (Neffke, et al., 2018). It can be said that the entrepreneurs are with the qualities of
speculation, coordination, arbitrations, observation, innovation and also with the good
decision making quality.
Entrepreneurship is very mandatory and beneficial for the economic growth of the country, it
is not only necessary for the business itself. Entrepreneurs believe in the passion and they
follow their passion. Entrepreneurship is very helpful in decreasing unemployment in the
country as when an entrepreneur establishes a business, and then human capital is required
to raise the company. Consequently it creates new job opportunities which lead to economic
growth. When an entrepreneur starts a new business then at initial stage they usually sell
their product or provide their services at very low prices; as this would help people to get the
opportunity to try the service or to check the product and they get to know about the qualities
of the product at reasonable price. In this way, entrepreneurship support in strengthening the
economy of a country (Parker 2018). Entrepreneurship supports the country in being
advanced through their creative ideas as when they bring new products and innovative ideas
to the market it makes the country advance in the fields of culture, science and technology.
From the above essay it has been concluded that entrepreneurs are the one who are
inclusive of talents such as innovative, intelligent and ambitious. They are the one who not
only think about the innovative ideas, they execute the creative ideas. Entrepreneurship is
not only about creative thinking but it also includes the execution of innovative ideas which
make changes to the society and help people with the problems they face each day.
Entrepreneurship creates job so it is very helpful in decreasing unemployment which would
leads to economic growth. Due to entrepreneur’s innovative approach, these entrepreneurial
firms have more potential for growth than the small business. Entrepreneurial firms need
effective and efficient management system along with the high degree of innovation and
creativity. These firms cannot be successful only with the innovative ideas and creative
strategies but it is required to manage these ideas and strategies in an appropriate and
productive manner (Debrulle 2016). Hence, an entrepreneur has to be a good manager for
the growth of business. It has been concluded that with the innovative ideas and strategies
one can enhance their local resources for the growth of the business. Entrepreneurial firms

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help in economic growth through transformation, employment and productivity extension.
Hence, above study explained the role of entrepreneurial firms in the economy why
entrepreneurs are important to any country.

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