Entrepreneurship is the process of identifying a business opportunity in the market, organizing and getting the necessary resources, combining factors of production and starting up a business towards maximization of profits with a view of becoming a successful business person. Entrepreneurship therefore involves choosing a practical business idea, investing resources to put the business idea into action and managing the business to success.
Entrepreneurship is a very important thing in an economy. Below are some importance of entrepreneurship in a country's economy:
1. Employment.
Entrepreneurship leads to creation of jobs or employment opportunities. Many job opportunities have been created through entrepreneurship and even to the entrepreneurs themselves.
2. Creation of wealth.
Through entrepreneurship, wealth is created for the country's economy. Formation of capital is one of the advantages that come with entrepreneurship. The country’s economy is boosted when there are many entrepreneurs in the country.
3. Exploitation of market.
With entrepreneurs in the market providing different goods and services, the market is exploited so that almost if not all needs of consumers are met.
4. Utilization of resources.
The available resources are kept in effective and efficient use when entrepreneurs find what to do to exploit the resources economically.
5. Increased competition.
With increase in entrepreneurs in the market, fair competition is encouraged in this ensures that nobody practices monopoly in the market.
6. Increases purchasing power.
Customers are able to choose from among different options and available substitutes to commodities since each and every entrepreneur will try to provide unique good and/or services.
7. Increases innovation.
Entrepreneurship encourages coming up with new ideas and options of improving the available products in the market. People are able to innovate new things through entrepreneurship.
8. Reduces imports.
With entrepreneurs providing missing products in the country or in the market, imports are reduced hence the funds which could have been used in imports are directed to some other useful projects of the country.
9. Improves infrastructure.
Through entrepreneurship,infrastructure is developed and improved. For instance, a business man will bring in electricity, good roads and so on in an area where he or she has started a business.
10. Raises standards of living.
With entrepreneurship creating and providing employment opportunities, people are able to improve economically and therefore are able to improve their living standards.
11. Reducing rural to urban migration.
Many new businesses are preferably started in the rural areas of Kenya with considerations that the rural areas still have the potential market and suitable space for expansion. Job opportunities are therefore provided by such businesses started in the rural areas and this has created employment to the local people thereby discouraging their migration to the urban centres.
12. Reducing foreign dominance of the economy.
Foreign countries have been known to dominate some sectors of the economy. With new businesses targeted to creating competition to such foreign businesses, the foreign dominance of the economy is reduced.
13. Promotion of technology.
Entrepreneurship also comes with improvement and promotion of technology in the sense that new businesses will always try to incorporate new ways of doing or performing their business deals.
14. Promotion of entrepreneurial culture.
Entrepreneurship also helps to culminate entrepreneurial culture in the society. It is very easy for others to copy or follow the trends that others have set or gone through with the view that they might also succeed as their fellows.
