At the risk of some oversimplification, the answers economists have given to this question can be divided into two broad camps, one following the ideas of Adam Smith and the other following the ideas of David Ricardo Smith, whose overriding goal was to understand the wealth-creation process, began his treatise with the lesson that the division of labor is limited by the extent of the market. As markets grew, entrepreneurship would lead to innovation, which would lead to an increasing division of labor and increased productivity. Ricardo, in contrast, envisioned economic output as being a function of the inputs of land, labor, and capital.
Role of Entrepreneurship in Economic Development Article shared by: Role of Entrepreneurship in Economic Development! The word development is used in so many ways that its precise connotation is often baffling. Nevertheless, economic development essentially means a process of upward change whereby the real per capita income of a country increases over a long period of time.
Then, a simple but meaningful question arises: This question has absorbed the attention of scholars of socio-economic change for decades. In this section, we shall attempt to shed light on an important aspect of that larger question, i.
The one major issue we shall address here is: Does it add an important independent influence to that of other factors widely agreed to promote economic development of a country like India? Smith extolled the rate of capital formation as an important determinant of economic development.
The problem of economic development was ergo largely the ability of the people to save more and invest more in any country.
According to him, ability to save is governed by improvement in productivity to the increase in the dexterity of every worker due to division of labour. Smith regarded every person as the best judge of his own interest who should be left to pursue his own advantage.
He always advocated the policy of laissez-faire in economic affairs. In his theory of economic development, David Ricardo identified only three factors of production, namely, machinery, capital and labour, among whom the entire produce is distributed as rent, profit and wages respectively.
Ricardo appreciated the virtues of profit in capital accumulation. According to him, profit leads to saving of wealth which ultimately goes to capital formation.
Thus, in both the classical theories of economic development, there is no room for entrepreneurship. And, economic development seems to be automatic and self-regulated. Thus, the attitude of classical economists was very cold towards the role of entrepreneurship in economic development. They took the attitude: The crucial role played by the entrepreneurs in the development of the Western countries has made the people of underdeveloped countries too much conscious of the significance of entrepreneurship for economic development.
Now, people have begun to realize that for achieving the goal of economic development, it is necessary to increase entrepreneurship both qualitatively and quantitatively in the country. Schumpeter visualised the entrepreneur as the key figure in economic development because of his role in introducing innovations.
Parson and Smelser described entrepreneurship as one of the two necessary conditions for economic development, the other being the increased output of capital. Harbison includes entrepreneurs among the prime movers of innovations, and Sayigh simply describes entrepreneurship as a necessary dynamic force.ICECD - International Centre for Entrepreneurship and Career Development Programs in Ahmedabad, Gujarat, Maharashtra also women entrepreneurs development in Ahmedabad, Gujarat, Maharashtra.
Loudoun Economic Development is dedicated to recruiting new business, growing our existing industries and improving our county's business climate. The Role of Entrepreneurship in Economic Growth his work The Theory of Economic Development, Schumpeter first says that entrepreneurship causes economic growth by allowing the means of production in a society to be used in newer and more efficient combinations (Schumpeter, p.
Conference Topics and Third Call for Papers RESEARCHING ECONOMIC DEVELOPMENT AND ENTREPRENEURSHIP IN TRANSITION ECONOMIES: The role of government in the economy.
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