The Concept of Economic Development has been the subject of much academic debate and has always remained on top of the agenda for policy makers/ Planners and government of any region. The word “Development” is used in many ways with many connotations but Economic Development simply means a process of positive / upward change leading to the increase in the per capita income of a country over a longer period of time. Then a simple but meaningful question can be asked what causes economic development? This question has absorbed attention of many scholars and every scholar came up his opinion and solution to this question there are many causes and factors responsible for the economic development but in this write up the focus is on the significance of the entrepreneurship as one of the causes for the economic development of a region to start with the concept of Entrepreneur and Entrepreneurship.
Concept of Entrepreneur and Entrepreneurship
An Entrepreneur is a person who is responsible for setting up of a business or an enterprise. In fact he is one who is imbibed with the qualities of Initiative, skills for innovations, and who looks for higher achievement. The urge to exercise power over things is an intrinsic quality of an Entrepreneur. The process of actions of an entrepreneur (person) which he undertakes to establish his/her enterprise simply refers to an Entrepreneurship.
Entrepreneurship is a multidimensional task defined differently by different authorities. The concept of entrepreneur and entrepreneurship is not only the area of study for pure economists but prominent social theorists such as Karl Marx, Weber, Sombard and Veblen also seems to be involved in this endeavour. “Sociologists consider him as a sensitive energiser-in the modernisation of societies, The Psychologists look upon him as an “Entrepreneurial man”, his motivations and aspirations are different from others and are conducive to development. Political scientists regard him as a leader of the system. To Economists, he is the harbinger of the economic growth. In short Entrepreneurship is what an entrepreneur does that is Innovation, Risk Taking, Decision making, organisation building, leadership, gap filling, exploiting an economic opportunity are the important tasks performed by the entrepreneur.
Entrepreneurship and Economic Development (General Perspective)
Richard Centallion a French economist was the first to use the term “Entrepreneur” and assigned him a position in economic process. Adam Smith, the Father of Political Economy treats him (Entrepreneur) as a Capitalist (Supplier of Capital). Joseph Schumpeter (1883-1950) an Austrian Economist was decidedly the first economic thinker who has assigned the entrepreneur a key role in the process of economic development. According to Schumpeter Entrepreneur is Innovator, business leader and not simply owner of capital thus entrepreneurship is essentially a creative activity. Schumpeter visualised the entrepreneur as the key figure in economic development because of his role in introducing innovations. Thus entrepreneurship is a creative and innovative response to the environment and introduces a critical element of dynamism into an economic system.
From classical economists to the post-Keynesian analysts there exists a difference of opinion among economists with regard to the role of Entrepreneurship in the economic development. Classical Economists especially Adam Smith and David Ricardo negate the role of entrepreneur in the economic development they are of the opinion that there is no room for entrepreneurship in the economic development of any region rather Economic Development is automatic and self regulated through unseen forces instead Adam Smith extolled the rate of capital formation as an important determinant of economic development. Thus the attitude of classical Economists was very cold towards the role of the entrepreneurship in economic development. On the other hand, the Economist like Schumpeter and Baumol are of the opinion that economic development of any region is an outcome of purposeful human activity. They assign pivotal role to entrepreneur around whom whole process of economic development revolves.
Entrepreneur is considered to be the focal point in the process of economic development of any region. It is due to this reason that renowned economist; Marshall observes that “Entrepreneur is the captain of the industry, and builder of economic structure of a country”. The economic history of the developed countries Like America, Russia, Germany, and Japan are also sufficient to support the fact that entrepreneurship and the economic development are the cause and effect respectively. It is due to the role played by the entrepreneurship in the economic development of the developed nations, the people in the underdeveloped countries begun to realise that for achieving the goal of economic development, it is vital to increase entrepreneurship both qualitatively and quantitatively in the country/region. It is only active and enthusiastic entrepreneurs who fully explore the potentialities of the country’s available resources and make best possible use of them.
Role of Entrepreneurship in Economic Development
From the preceding lines it is very much clear that the industrialisation of a country and its pace of economic development decisively depend on the quantity and qualitative entrepreneurs it posses. The entrepreneur plays an unimaginable role in the process of economic development of any area/region/Country by:
Increase in per capita Income
Generation of Employment
Balanced regional growth
Improvement in standard of living
Backward and forward linkages
Development of New products, Techniques, Methods, Technologies
Inspire others towards Entrepreneurship
Augment new enterprises.
In light of above discussion the economic woes of Jammu and Kashmir need to be addressed at an earliest and general public especially the intellectual class of this region need to understand and realise the role of entrepreneurship in the economic development of this undeveloped region. Sooner we realise the better it will be as our realisation will motivate us to act and act for change and betterment. Again many questions may strike minds of those who aim to be entrepreneurs in this part of the world with special economic features and volatile environment those questions will be addressed in the next write up
(To be Continued……)