Advantages of Entrepreneurship for Individual and Society
Advantages Of Entrepreneurship Make It A Great Choice In Spite Of The Risks Involved
Entrepreneurship entails risks, but its advantages are far too enticing to ignore, both for the entrepreneur as well as for the society. Nothing creates personal wealth like entrepreneurship, and nothing helps the economy as it does. Thus, it is surprising that more people are not opting for it. May be they need to consider it more seriously. May be Governments need to promote it as well.
There are very few instances of a society or an individual becoming rich and prosperous without relying on the power of entrepreneurship. In the ancient world too, ages before the industrial revolution changed the world, there were entrepreneurs that took big risks in initiating distant trades, sometimes across continents, and made themselves and their countries rich from it. There were times when silk route trade brought great prosperity to India and China by enabling their products to be traded in the Western world.
Much later, from the sixteenth century onwards, the commercial and political success of large entrepreneurships like the British East India Company initiated by the European States redefined the world and created the global order that we have inherited today. In the last few decades, it is the entrepreneurship of companies like Microsoft, Apple, Intel, Google, Facebook and Amazon that is defining prosperity in our world, and also changing the way we live.
Clearly, if one is looking to create prosperity for oneself or as the society at large, entrepreneurship is the way forward!
Common Disincentives for Entrepreneurship
There are many disincentives that often discourage promising individuals from opting for entrepreneurship. The most important of them are the lack of awareness, lack of capacity, lack of access to finances and the risks involved. In developing world however, there are often additional disincentives created by a plethora of Government regulations of questionable utility.
Ironically, many of these are brought forward from a colonial legacy that was intended to throttle rather than encourage entrepreneurship.
Entrepreneurship thrives primarily on the information and mental capacity of entrepreneur to conceptualize a process by which he can bring either a new product to the market or produce and supply an existing product at a lower cost. Unfortunately, most of the formal education systems, with the exception of structured courses in eminent business management schools, do not prepare youngsters for such an initiative.
Financial resources are an equally important constraint. Stories abound of several successful entrepreneurships that began with a few college drop outs, sometimes working from garage or similar places, before tasting success and ending up as multi-million or multi-billion enterprises. In particular, entrepreneurship can be a difficult proposition to take for an individual of average means, due to the difficulties in procuring even the minimal working capital. It is not easy for untested youngsters to get financed for their dreams, however solid they may be in content.
These difficulties often compel bright youngsters, full of creativity and ideas, to opt instead for a regular job in an existing enterprise with limited avenues of growth but a relative assurance of a monthly salary. Unfortunately, when they tread this safer path, they also forego their opportunities to make it big in life!
Advantages of Entrepreneurship for the Individual
For an individual looking for a choice between a regular job and an entrepreneurship, he must not fail to take into account the brighter aspects of entrepreneurship.
The first of them is the higher level of earning that one can get with a successful entrepreneurship. Once a successful enterprise is established, and it has a regular stream of revenue and income, the future projected income determines the capital value of the enterprise. Once an entrepreneurship is successful, a share of its ownership becomes precious and investors are willing to pay for it. This means that an entrepreneur does not have to wait for years to earn and can actually encash his success much earlier, by selling a stake of the ownership to investors.
A second advantage of entrepreneurship is that you own your work and its outcomes. Unlike an employee, an entrepreneur is responsible for both the positive and negative consequences of your actions. It means that your passionate hard work will end up paying you and not your master!
Another great advantage with entrepreneurship is the freedom to be innovative. For many people, money is less important than creativity. Such creativity is common in arts but often difficult to find in commerce, where the money is. An innovative entrepreneur is one of the few exceptions to this rule. In fact, commercial innovation can be a source of satisfaction itself, in addition to the financial returns.
For many, entrepreneurship is great because it allows you to be your own boss. Subordination is a dish that is not equally popular with everyone. In fact, for a person, who prefers to take responsibility of his own actions, having your own enterprise is any day preferable to taking orders from someone else.
While it may be possible for someone to get bored with a regular job in life, an entrepreneur never tires of his work. An entrepreneur is always looking for opportunities of further improvement. For him, every new challenge, even a crisis, can be an opportunity to do something new. When a business is completely settled, and it can be handled by anybody, an entrepreneur would like to look for opportunities for a fresh entrepreneurship.
Lastly, an entrepreneur who sets up his own business can keep involved in it for the rest of his life. A true entrepreneur never retires. He just delegates part of his work to others as he becomes senior.
Advantages of Entrepreneurship for the Society
Most of our economic advancement has resulted from entrepreneurs finding new ways to supply new, better or cheaper goods and services, that make the life of the buyers better off, and which are valued by consumers more than the price that they pay for it. Every such good or service adds welfare for the society.
When an entrepreneur develops a successful enterprise, and earns revenue and profits, he also contributes to the society by paying taxes. Thus, an entrepreneur not only makes himself richer, he also makes the state more prosperous, and thereby contributes to the public goods provided by the State for its people.
Most economies, especially the developing ones are constrained by high rates of unemployment. When more people compete for a few jobs, a lot of human resources of the society are wasted. When people are unemployed, it creates all kind of social problems. Thus, an entrepreneur, by developing a new business not only gets himself employed, but also creates new jobs for other less fortunate ones, and does an immense service to the society.
Entrepreneurs are like agents of evolution for the economy. By setting up more efficient commercial ventures and producing goods that are valued higher by the society, an entrepreneur shifts the factors of production from low value creating businesses to higher value creating ones, and thereby takes forward the process of economic growth.
Lastly, in the 21st century economy we are experiencing an accumulation of capital. In the absence of viable commercial ventures where it can get usefully deployed, it begins to chase assets leading to speculative asset bubbles as commonly observed in stocks, real estate, gold and even crypto-currencies. By channeling capital into productive processes, entrepreneurs help a great deal in preventing such speculative bubbles and stabilizing the economy.
To put things in perspective, the world does not run on charity. Even the richest man can only give as much as he owns. However, an entrepreneur, by setting in place a process of production and sale that is commercially viable, contributes in an ongoing manner, to the welfare of the buyer who becomes better off, the state that gets more taxes, the workers who get more job opportunities and the economy which grows further.
In addition, he also earns for himself!
Also See Importance of Entrepreneurship