If a country wants to increase prosperity and welfare, then the country should focus on its economic growth. Most institutions in a country create the environment for the creation of wealth that leads to increasing economic growth. For this, both public and private sector collaborate to increase productivity, but, in developing nations institutions are not strong enough to lead to an increase in economic growth. This is because institutions in these countries concentrate on profit at the expense of consumers.
The key to growth and development is the healthy relationship between the Entrepreneurship and government institutions. However, in developing nations the situation is opposite; the government doesn’t function at an optimal level so as to boost entrepreneurship – which is essential to boosting a nation’s economic growth. The reasons behind the failure of economic growth are the lack of three important ingredients: ownership rights, rule of law and free trade. As far as entrepreneurship is concerned, it is the main solution to stimulate the economy in a developing nation, as entrepreneurs allocate scarce resources and produce better commodities to satisfy the needs and requirements of the people.
When government institutions are not involved in entrepreneurship, there is genuine competition among entrepreneurs, as a result of which there will be innovations in the economy. Furthermore, due to competition the prices of goods will lower benefitting each citizen and expanding access to commodities – even those commodities that were hitherto out of the reach of large chunks of population. A combined result of innovation and lowering of prices of commodities is the availability of better quality goods at cheaper rates for the population.
The intention of accumulation of higher profits can lead to inequality in the society over the long run. However, in scenarios of healthy competition, entrepreneurs focus less on short-term higher-profit accumulation and more on sustainable models of growth that progressively leads to better outputs over the long run. Competition encourages risk-taking behavior and compels businesses to innovate at each step while also finding ways to satisfy consumer demands – be they concerned with (product) prices or quality or durability or so on. This process helps in growth maximization, social objectives maximization, and sales maximization.
Today’s world is growing and communicating at a faster pace in comparison to any other epoch in the past. It has been observed through many a research projects in different countries that entrepreneurship can lead to economic growth which includes countries like Uganda, Thailand, and Brazil etc. The countries with the most entrepreneurs are going through a commercial revolution. However, one of the things to be desired of entrepreneurship is that it can and should take the lead on fighting corruption. Corruption is a global problem. Many companies across the world continue to struggle in the face of corruption. Its complexities are such that companies and their leaders must continuously balance business objectives with a host of risks. Strong leadership is critical to combating corruption.
Further, developing nations need certain elements for generating consistent policies that can strengthen their entrepreneurial ecosystem. These include an efficient regulatory framework, robust funding and finance, creative mentors and advisors, forward-looking education and training, productive human capital and workforce, and competitive local and global markets. The challenge for government policy is to develop policies that work, but avoid the temptation to try to effect change via direct intervention.
Growth can happen with improvements and innovations. Power of innovation and investments in building local supply chains are to be led by young entrepreneurs. These self-sustaining individuals will define the future of the region. In creating this talent ecosystem, the private sector, with their deep expertise in technology and research, can play a defining role.
Entrepreneurs are willing to do what it takes to fuel economic growth and create jobs around the world. If we want to supercharge the global economy, we need to pursue policies that help. Entrepreneurs working to build businesses, create jobs, and grow the global economy should be encouraged. They’re ready to lead the way to share prosperity and welfare only if there is no government intervention, if there are strong property rights, rule of law and free trade etc. I would like to conclude with a simple yet important assertion: “Economic growth is in the hands of entrepreneurs”.