Role of Entrepreneurship in Economic Development

1 International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 2, February 2013 i-Xplore International Research Journal Consortium 1 Role of Entrepreneurship in Economic Development With special focus on necessity Entrepreneurship and opportunity Entrepreneurship Dr. Sangya Shrivastava, Director, Rai Business School, Raipur Roopal Shrivastava, Research Scholar, MATS University, Raipur ABSTRACT Entrepreneurs are people who create new businesses, which help create new jobs for people.

2 They help in intensifying competition, with the help of technology they master in increasing productivity and thus contributing in the Development of the country, followed by Economic growth. So it can be said that Entrepreneurship is good for Economic growth .The paper will justify how far this stands true in reality. Now if the Entrepreneurship allows informal self employment which means without formally creating new business then it could be assumed that high levels of Entrepreneurship would correlate with sluggish Economic growth and sheathing Development .

3 Study further mentions findings of a survey known as Global Entrepreneurship Monitor (GEM) project which is related to understand how different types of Entrepreneurship affect Development of the country. The term necessity Entrepreneurship , is in the paper, which means to become an entrepreneur because you have no better option. It is different from opportunity Entrepreneurship , which is an active choice to start a new enterprise based on the perception that an unexploited or underexploited business opportunity exists.

4 We have collected secondary data available and literature previously studied. The data analyzed reveals that effects of necessity and opportunity Entrepreneurship on Economic growth and Development vary greatly. The study has been concluded that necessity Entrepreneurship bears no effect on Economic Development and opportunity Entrepreneurship has a positive and significant effect. INTRODUCTION "Business opportunities are like buses, there's always another one coming.

5 " - Richard Branson, founder of Virgin Enterprises Entrepreneurship has at two meanings: First, Entrepreneurship refers to owning and managing a business. This is the occupational notion of Entrepreneurship creation of new business. Second, Entrepreneurship refers to entrepreneurial behavior in the sense of seizing an Economic opportunity. This is the behavioral notion of Entrepreneurship . The entrepreneur, therefore, is someone who specializes in making judgmental decisions about the coordination of scarce resources.

6 The term emphasizes that the entrepreneur is an individual. As G. L. S. Schackle wrote, The entrepreneur is a maker of history, but his guide in making it is his judgment of possibilities and not a calculation of certainties, and identified uncertainty-bearing as the Economic function of the entrepreneur. According to Schumpeter, the entrepreneur is the prime mover in Economic Development and his function is to innovate. It is defined and established in traditional theories that Investment in new knowledge increases the technology opportunity set and sharpens the ability to look into the future.

7 Entrepreneurial activity thus could be very well understood as the activity that holds the discovery, evaluation and exploitation of opportunities within the defined established framework and how these opportunities are discovered exploited is related to institutional arrangement of the country or the individual. During the study we found four types of ventures: independent start-ups; spin-offs; acquisitions; corporate ventures How was the necessity Entrepreneurship born?

8 After the fall of the Berlin Wall many uneconomical factories were closed in Central Europe as economies became integrated into the global economy. Those workers who had jobs in the plants and factories of the former socialist countries were productive members of society. However, as factories were closed one after another, many of these workers found them- selves with no other options for work than self employment necessity Entrepreneurship .

9 As one would expect, the influx of many former wage workers into necessity Entrepreneurship resulted in several years of negative GDP growth. When a new business opportunity is taken up or exploited it is assumed that it will lead to Economic Development but on the other hand taking up of necessity Entrepreneurship may not lead to the same. It also may be the case that under Development may happen due to self employment. Many countries have some level of both opportunity and necessity Entrepreneurship , studies suggest that the ratio of opportunity-to-necessity Entrepreneurship could be a useful indicator of Economic Development ; we can say it International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No.

10 2, February 2013 i-Xplore International Research Journal Consortium 2 can also act as a guide for Development policy for the policy makers. So the equation comes out to be of positive relationship between the opportunity ratio and GDP per capita. The suggestion could be given to less developed countries that they should focus on strengthening General National Framework Conditions, and developed economies policy should focus on strengthening the entrepreneurial framework conditions.