Entrepreneurship As A Catalyst for Economic Prosperity, Not Aid
Aid is ineffective. By some estimates, more than $2-trillion has been spent fighting poverty for seven decades, with little direct impact. Нe stories of failure are illustrated with hydro dams that never function, crops that never grew and roads that went nowhere. Entrepreneurs, however, are changing the world. Since 2005, an estimated half-billion people or more have been raised out of poverty, mainly by small business, trade liberalization and gains in productivity. In China, Pakistan, Indonesia, and Nigeria, booming local economies, oblivious to the latest schemes of aid programs, are creating millions of jobs. Нe Brookings Institution recently predicted even more dramatic gains ahead: “Between 2005 and 2015, India, Bangladesh, Vietnam, and Ethiopia are each expected to grow by at least 6.3 per cent per year, and in the process, each is likely to see a quarter of its population liіed out of poverty.” Entrepreneurs, not aid spending, are driving this growth. Нe creativity that led to this dramatic progress in the fight against world poverty was the grudging realization by donors that aid planners do not create jobs- small business does. Entrepreneurship is crucial to economic development because of her demography dividend at the same time it large population which creates a huge market. the advantages to Sub-Saharan Africa will be greater if all the governments can encourage it as a survival model in reducing poverty. Entrepreneur paves the way to industrialization; industrialization strategies could better target high-potential entrepreneurial activities to accelerate industrialization. Entrepreneurs play an essential role in bringing innovation to an economy, notably innovative technologies and production methods.
According to African Economic Outlook 2017, Entrepreneurship also pushes up total productivity through the process of “churning”. New innovative firms put pressure on older firms to innovate. Entrepreneurship encourages diversification into new economic sectors and adapts foreign technologies to local markets for its growth. It’s bolstering industrialization by eٹciently shiіing resources away from traditional sectors into a more modern one. Landes express that entrepreneur serves as a solution provider where government failed to function, it is oіen seen as a mechanize that provides public service leі by the governments. High-potential entrepreneurs also experiment with new products in local markets. Нey oوٴer fresh ideas and exchange information with other local producers, potentially increasing competitiveness by shiіing resources to higher-productivity activities. However, scientific facts on the relationship between economic growth and entrepreneurship are conflicting Van Stel et al.  stated that entrepreneurship has a significant relationship with per capita GDP in developed nations, Reynolds et al. reports negative relationship performance and real per capita GDP among all the nations studied.
Entrepreneurship contributes to economic growth and diversification. It drives structural transformation and industrialization leading to inclusive and sustainable socio-economic development. As entrepreneurs start and grow their firms, they transform the economy and drive broader outcomes contributing to the global sustainable development agenda and SDG’s Goal 8 describes the need for promoting sustainable economic growth. Нese will result in the promotion of full and productive employment and decent work for all. Sub-Saharan governments should embrace this goal as it advocates for policies promoting job creation and full and productive employment and entrepreneurship can be used as a solution.
Source: Journal of Socialomics