It is well comprehended that maximizing and capitalizing on micro, small and medium enterprises is essential for Ethiopia in particular and for Sub-Saharan Africa in general as all the factors relating to economic growth help make change. For inventors and innovators, who sometimes come from established firms, setting up their own business often appears to be the only way to commercialize ideas.
Entrepreneurship is a key driver of economic growth and development. It leads to an increase in gross national product and per capita income by creating new businesses and jobs. This is particularly important for developing countries like ours, where poverty and unemployment are the major concerns to be well dealt with.
Cognizant of this fact, The Ethiopian Herald had a stay with Sifen Balcha, who graduated from Addis Ababa Universality in Marketing Management, working as an entrepreneur consultant as well as at present engaged in entrepreneurial orb.
She said, “Without a shadow of doubt, the role of entrepreneurship in economic development is substantial. After all, entrepreneurs don’t just build businesses and grow their personal wealth; they also impact the economy by creating new jobs and opportunities, driving innovation, and developing new markets, products, and services. The importance of Entrepreneurship for real change is now well comprehended in Ethiopia.”
As to Sifen, entrepreneurship drives the growth and diversification of the economy and is of paramount importance in driving economic growth, creating new job, encouraging innovation by bringing new ideas, products, and services to the market, contributing to social change by developing products or services that reduce people’s dependence on outdated technologies, addressing social and economic problems by creating solutions that meet the needs of society as well as enabling competition which improves business efficiency and lowers prices for consumers.
Besides, she added the role of entrepreneurship in economic development has different salient takeaways like it has helped raise standard of living. This means that a significant role of entrepreneurship in economic development is that it can greatly enhance the standard of living for individuals and communities by setting up industries and creating wealth and new positions.
“Not only does the move provide large-scale employment and ways to generate income, it also has the potential to improve the quality of individual life by developing products and services that are affordable, safe to use, and add value to their lives,” she opined.
Besides, entrepreneurship reduces the nation’s dependence on imported goods and services and promotes self-reliance. The manufactured goods and services can also be exported to foreign markets, leading to expansion, self-reliance, currency inflow, and economic independence.
According to Sifen, entrepreneurs identify market needs and develop solutions through their products and services to begin their business venture. By starting new firms and businesses, they play a key role in shaping the economy and creating a more dynamic and diverse business landscape.
As to her, entrepreneurship also promotes innovation and competition, leading to new and improved products and services that contribute to economic growth and development. It also helps operators and other beneficiaries boost capital formation and foster the process of accumulating resources, such as savings and investments, to fund new business ventures and support economic growth.
Truly speaking she said the ultimate goal of entrepreneur is to lift people out of poverty by generating employment and stimulating economic activity. Entrepreneurship also contributes to the development of local economies and helps improve the overall standard of living. Equally, operators work can help build stronger, more vibrant communities and promote social and economic development.
Entrepreneurship can also help identify market opportunities and allocate resources in the most effective way possible. It also plays a key role in developing innovative products and services that meet the needs of customers while optimizing the use of available resources, she added.
At the end of the day, entrepreneurship contributes a lot to national economic growth as it can play a significant role in increasing economic growth and prosperity by increasing Gross National Product (GNP) and Per Capita Income, as to Sifen.
Yes, entrepreneurs often create new technologies, introduce new products or process innovations, and open up new markets. By establishing new businesses, they intensify competition for existing businesses; stimulate employment growth by generating new jobs when they enter the market. There is a direct employment effect from new businesses that arises from the new jobs being created, she noted.
According to Sifen, entrepreneurship is considered crucial to a dynamic economy, and entrepreneurs create employment opportunities not only for themselves but for others as well. Entrepreneurial activities may influence a country’s economic performance by bringing new products, methods, and production processes to the market and by boosting productivity and competition more broadly.
Sifen said, “Realizing the fact that these advantages require institutions that contribute to an environment that is friendly to entrepreneurs, the government policies and strategies have to be appealing and doable in terms of shaping country’s innovativeness. Protecting material property rights ensures that any wealth creation stays with the entrepreneur, while protecting intellectual property rights fosters entrepreneurship and innovation. The nation needs to capitalize on these aspects, too.”
Entrepreneurship, with its focus on opportunities, is often seen as one of the cornerstones of poverty alleviation in developing nations like Ethiopia. One of the key objectives of modern economics is to determine factors that influence the economic development. In fact, entrepreneurship is the engine of economic growth and it has come to be perceived as a catalytic agent for expansion and promotion of productive activities in every sphere of economic life, indeed! Entrepreneurship is generally described as the ability of an individual or a group of individuals to create or discover an opportunity and utilizes it to the benefit of the society, which, in turn, will bring success to the innovators and their organization thereby coming up with economically strong nation, she underlined.
Here, she said both the economists and policy makers recognize the role of entrepreneurship on the economy of a country. In fact, entrepreneurship has been considered as the engine of economic growth and it has come to be perceived as a change engine for expansion and promotion of productive activities and economic advancement.
Playing a crucial role in increasing the competition of emerging sectors, new small businesses are critical to economic growth and innovative capacity in Ethiopia. Job creation, economic growth and poverty reduction are usually the main political interests in entrepreneurship. Entrepreneurship is therefore, a driving force within the economy, particularly due to entrepreneurs’ innovative nature, Sifen underscored.
Moreover, she added the fact about entrepreneurship and what it can do to bolster Ethiopian economy remain inevitable; that is why entrepreneurship is identified as an important driver of employment creation. It boosts economic growth by introducing innovative technologies, products, and services. It also provides new job opportunities in the short and long term. Such a bold move helps the nation record remarkable development towards economic progress leading to poverty reduction; stimulate employment as well as fast-tracking poverty reduction across the nation.
“Of course, innovation, entrepreneurship curriculum training and education, individual entrepreneurial characteristics, the participation of micro, small and medium enterprises, youth empowerment, the collaboration of government-university-industry are the key tool for entrepreneurship development which is stimulating employment are eventually alleviating poverty,” Sifen accentuated.
Policy makers must identify the priorities in which resources should be invested in order to stimulate growth. Necessity-driven entrepreneurship and informal entrepreneurship are unproductive, indeed. Entrepreneurship can also fuel economic growth under the right conditions and when people become entrepreneurs for the right reasons. It is not, however, a magic bullet for growth, particularly in less-developed economies such as Ethiopia. Social entrepreneurship can attempt to deliver both profits and societal good though it is often accompanied with mixed results.
In a nut shell, entrepreneurship is the process of creating or starting a new business venture in order to make a profit by identifying a need in the market and fulfilling it and contributing a lot to national economic progress at the end of the day. This can include developing new products or services, finding new ways to produce or deliver existing ones, or creating new business models. The relationship between entrepreneurship and economic development is thus complex, but it is generally agreed that entrepreneurship plays a crucial role in driving economic growth, development and prosperity. It has also helped citizens create new businesses and jobs, generate innovation, and stimulate competition, all of which contribute to a more productive and efficient national economy.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD SUNDAY EDITION 10 MARCH 2024
