A Critical Analysis of Entrepreneurship: Benefits, Risks, and Impact

This essay provides a critical analysis of entrepreneurship, examining its multifaceted role in economic development. It begins by highlighting the importance of entrepreneurship in fostering economic value, emphasizing its contributions to productivity, growth, employment, and innovation. The discussion delves into the creation of jobs, the optimal utilization of resources, and the generation of new products through entrepreneurial ventures. The essay also explores the relationship between entrepreneurship and innovation, including the establishment of research and development and technological advancement. Furthermore, it addresses the advantages of entrepreneurship, such as increased utility for individuals and regional development through job creation. However, it also acknowledges potential disadvantages like monopoly creation, high risks, and the issue of self-employment not always indicating economic development. The essay concludes by asserting that entrepreneurship is a net profit, and with active government participation, entrepreneurial activities can be boosted, leading to employment and economic growth.

Critical Analysis of Entrepreneurship

Introduction
Entrepreneurship is now intensely practiced and researching over it has become important as it is
related to the core development of the nation and now has become a global phenomenon. The
purpose to analyze this topic is to understand how entrepreneurship adds to the economic value.
The statement does not have a clear answer; until it is supported by evidences that go on throw
light on productivity, growth, employments and also innovation. These are also the pillars of a
successful entrepreneurial set up.
Discussion
If one is an entrepreneur then it is important that the person is engaged in creating vision and also
actively engaged in linking that vision to other people by means of hiring which can also be
termed as stakeholders.
With the help more entrepreneurial activities, there is creation of job. When an organization is
established, the capital varies. Some are micro sized while some are medium and small sized.
Then, there are also large sized businesses. There is always employment that takes place. The
employment may range from permanent to temporary or contractual, but the fact cannot be
denied that it is generating employments which cannot be recorded as a negative point (Navarro,
& Jiménez 2016).
While the exploitation of the resources has become an important issue, the entrepreneurship has
enabled the optimum utilization of the resources. The resources are optimally utilized with the
help of entrepreneurs having innovative ideas. Ideas and a proper market analysis is the base to
start a venture. By creating value for the product, entrepreneurship adds value to the firm or the
company that again leads the investors to invest in the company which enhances the size of
operation thereby creating more space in the organization leading to more employment
opportunities (Desai 2017).
Entrepreneurship is making new products possible as the entrepreneurs are engaged in
conceiving ideas and giving it the shape of the product. Then this product is carefully placed
amongst the consumers using different marketing strategies (Desai 2017).

As entrepreneurship is closely related to innovation, there is an establishment of research and
development which is quite fruitful for the development of the economy as a whole. Innovation
in the right direction also leads to more technological advancement. Advancement is possible
only through entrepreneurship and it is through this that more employment opportunities are
going to be created (Venkataraman 2019).
A major contribution that is there because of the entrepreneurship is that it helps in increasing the
utility level of the individuals. The utility of the individual enhances in terms of employments
and the effective utilization of the skills that are possessed by the employees. With the absence
of entrepreneurship and entrepreneurial activities, the employees may remain under skilled and
this is going to be a loss to the economy. The economy is better utilized with the help of
entrepreneurial activities and it has become vital to have it (Urbano & Aparicio, 2016).
Only innovation is not enough. The innovation can be done but the innovation getting effective
commercial space; it is not going to be out in the market. Hence, commercialization of the
innovation becomes an important phenomenon and this is possible only when the market experts
are working on it (Navarro & Jiménez 2016).
In terms of employment, many reports have observed that due to entrepreneurship that there are
advantageous spill overs in the region. The organization has a regional belonging, which means
that it has a geographical area. Through entrepreneurship, there is employment generation which
in turn helps in regional development. It is through the entrepreneurship that there is a secure
labour market and also availability of the high paid jobs (Navarro & Jiménez 2016).
There are several disadvantages that have been noticed about it. It is entrepreneurship that leads
to monopoly. Monopoly creates a control over the market which is not beneficial for the
customers as they are going to be charged high for the products because of availability of no
alternative company. Though, there can be creation of alternative products like in cases of tea
and coffee. But, in most cases there can be exploitation of the customers and this is not healthy
for the welfare of the people. However, in oligopoly the competition gets intense with the limited
number of producers and the customers gets the best product that be can be produced with
effective resource utilization and also research and development (Navarro & Jiménez 2016).

There is a substantial amount of risk involved in entrepreneurship and the risk complete failure is
also quite high. There are about 40–50% business that fails in the very first year. When the
business fails there is a huge loss and apart from the personal loss it is also a waste of the
resources that is unable to create utility (Venkataraman 2019).
Here, the organization is also going to have loss of jobs. When the organization fails there is
increase in the number of unemployed people and it often takes a long time before they are
absorbed into some other organization. The period where the labourers are unemployed is
recorded as loss to the economy (Desai 2017).
One major issue with the whole concept of entrepreneurship is that we have the mind-set of
including self-employment as entrepreneurship and it is not the indicator of economic
development. If there is a high amount of self-employment in an economy, it does not mean that
there is also going to be high growth. In many under-developed economies there are many cases
of self-employment but that is not typically entrepreneurship.
Conclusion
After carefully going through the literatures, it may be said that entrepreneurship is net profit and
with active participation of the government the entrepreneurial activities in a nation can be
boosted up, generating employment and fostering economic growth and development.

References
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