RELATIONSHIP BETWEEN ENTREPRENEURSHIP AND ECONOMIC GROWTH

ENTREPRENEURSHIP: The act of creating a business which requires the ability to organize an opportunity, shape a goal and take advantage of a situation. GROSS NATIONAL PRODUCT: Describes in monetary value the total annual flow of goods and services in the economy of a nation. SMALL-SCALE ENTREPRENEURS: The people who establish business with a small amount of capital.

Contributions of Entrepreneurship in Economic Growth EMPLOYMENT: As a new business is formed and developed, the opportunity for people to have jobs increases. The formation of new businesses can decrease the list of unemployed in the country, thus, increasing the Gross National Product. FOREIGN EXCHANGE: Businesses that are engaged in exporting products bring dollars in industry. This is useful especially when peso-dollar exchange rate is high in favor of the dollar.

INDUSTRY LINK: Small-scale entrepreneurs supply goods and services to big companies. These transactions lead to the sharing of knowledge regarding advancement in technology. This will result to a higher quality of goods and services offered. NEW MARKETS AND PRODUCTS: entrepreneurs venture in business to create products that the consumers need. Through their creativity, they offer different goods that contribute to the country’s GNP. Increased production means more income for the government.

Socio-economic Benefits of Entrepreneurship IMPROVED STANDARD OF LIVING: People are provided with new products and services that make their life easier and more enjoyable. A MAIN SOURCE OF DEVELOPMENT: If more people are engaged in entrepreneurial activities, then more job opportunities will be generated. This will eventually result to greater GNP. SOCIAL BENEFITS: Government money which is gathered through tax from different establishments including businesses is used to improve national roads, industrial and agricultural facilities, medical services and other areas that are of society’s concern