The following Role of Entrepreneur in Economic Development are: 

1. Promotes capital formation

2. Creates large scale employment opportunities

3. Promotes balanced regional development

4. Reduced Concentration of economic power

5. Improvement in per capita income etc.


The role of Entrepreneur in Economic Development is listed below;

1. Promotes capital formation

Entrepreneurs promote capital formation by mobilizing the idle savings of the

public. The profits they earn by employing their own as well as borrowed funds

leads to the creation of wealth which ultimately leads to capital formation.

Entrepreneurs are referred to as human agents needed to mobilize capital to

exploit natural resources to create and carry on trade.


2. Creates large scale employment opportunities

Large scale unemployment is a major economic problem of developing

countries which hampers development. By establishing small and large scale units

, entrepreneurs provide job opportunities to many ,not only in urban areas but also

rural areas. As time passes these enterprises grow, providing direct and indirect

employment to many more.


3. Promotes balanced regional development

Most of the industries are established in urban areas. Government encourages

entrepreneurs to start units in lesser developed and backward areas by providing

them with subsidies and concession. When entrepreneur establish their units in

those areas there are a number of benefits like improvement in transport facilities,

health , education, entertainment and so on. Setting up of more industries leads to

more development thereby promoting balanced regional development.


4. Reduced Concentration of economic power

It is quite obvious that industrial development leads to concentration of

economic power in he hands of a few individuals which sometimes can lead to

monopoly. This probe can be redressed only by encouraging more people to take

up entrepreneurial activities which will help in reduction of economic power

amongst a few.


5. Improvement in per capita income

Entrepreneurs mobilize the resources and use them in profitable activities.

This helps to generate wealth and increase the gross national product as well as

per capita income of the people of the country which is a sign of economic

development.


6. Promote country’s Export trade

Entrepreneurs undertake manufacturing of import substitutes thus reducing

dependence on foreign countries. They also export goods and services to other

countries there by earning foreign exchange for the country. Such increase in

import substitution and export promotion are indicators of economic development.


7. Improvement in the standard of living

The income earned by the people through the job opportunities provided is

used to purchase goods and services. These goods and services are standardized

and available at low cost. This enables the people to avail of better quality goods

at lower prices which in turn raises their standard of living .Consumers enjoy new

and better variety of goods and services.


8. Government Revenue

Entrepreneurs help in generating revenue to the government by way of

payment of taxes and duties.


9. Induces Backwards and forward linkages

When an enterprise is established in accordance with the changing technology

it induces backward and forward linkages which stimulate the process of

economic development. Small firms depend on large firms and vice versa.Hence

by supporting one another , entrepreneurs ensure the movement of wheels of

economic development