The impact of
entrepreneurship on economic growth
This article talks about how
entrepreneurs affect economic growth and the economy as a whole. It states that
many literature argue that there is no definite answer or a framework that
portrays how entrepreneurs affect the economy, however there are some variables
that could be considered.
These variables are:
·
Innovation
·
Competition
·
The entry and exits of firms in an industry
·
Conditions (personal traits, institutional and
cultural elements)
The author also argues that entrepreneurs, due to their new
opportunity seeking and their willingness to enter a market while they are
uncertain of what the outcome will be, introduces new ideas in existing
markets. Furthermore, relating to Kirzner, entrepreneurs could also be viewed
as innovators, as they introduce new ideas and concepts to the market, which
helps the markets to improve, as well as, might help the economy. For example
Bill gates, Microsoft is a huge success and helps the economy, as well as, made
it possible for other computer engineers to come up with other programmes that
are used worldwide, such as SPSS for statistics. Another example would be
Google; the creation of search engines helped the online selling, as well as,
connected the customers to the sellers.
He states 5 strands of empirical evidence to show
entrepreneurs contribution to economic growth:
1.
The turbulence effect of entrepreneurship
2.
The effect of and changes in size distributions
in regions
3.
The number of market participants in an industry
4.
The effect of business owners and
self-employment
5.
The economic history of previously centralized
and planned economies
He also argues that entrepreneurs are key to innovativeness
and product improvement. Furthermore, they help the community by offering jobs,
as well as, in some cases they donate to charities.
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