Many of the ‘necessities’ that we take for granted today were not around till just a few years ago, when some enterprising individuals thought them up, and brought them into existence. Apps, wearable’s like the Fit-bit, drones, Amazon Echo, smart homes, tablets… every single one of them is the brainchild of an inventor. The cell phone that you are probably reading this article on, while waiting for a Skype call to start, on the Wi-Fi network at the coffee shop has also been made possible because of someone’s ingenuity.
Charles H. Duell (the Commissioner of US patent office in 1899) is credited with the famous utterance that “everything that can be invented has been invented.” If he were alive today, he would be immensely surprised at the rate at which inventions have come into being since then, and continue to do so. Some detailed reading shows that this is a well-maintained myth and there is no record of him actually having said this, but the point is that inventions and entrepreneurs keep the wheels of society moving.
Many inventions came into existence solely to make living easier and soon gained popularity and were mass-produced. The entrepreneur eventually transferred economic resources from a low yield area to a high yield one, creating opportunity for employment, materials and goods transfer, and opening the doors to trade and industry.
If this isn’t a significant contribution to the economy then what is? According to Schumpeter (1975), capital and output growth in an economy is largely dependent on smart entrepreneurs who create prosperity and wealth for a region. On the other hand, surveys conducted by the Gallup Organization, the American Census Bureau and Bureau of Economic Analysis explain that entrepreneurship and economic growth are not correlated (as evident from the image below).
Some countries seem to forge ahead while others lag behind in economic growth, perhaps depending on the quality of the entrepreneurs. This does not necessarily mean that some nations lack ideas while others are bursting with innovations. However, having an idea and bringing it to life are two separate things, and that’s where the enterprising individual makes a difference.
Innovation is the most vital function of an entrepreneur and it requires a free enterprise and a mixed economy to thrive. No wonder, this has spawned the growth of co-working spaces. There is more to economic growth than just an entrepreneurial spirit. It requires the support and desire of the nation as a whole.
Take China, for instance. Its explosive economic growth over the past 25 years is largely due to the entrepreneurial drive of the Chinese people. Across businesses, geographies, industries and demographics there is a distinct independent spirit – one of ambition and optimism, with a healthy dose of curiosity. The arrival of the internet helped spur this even further with many innovators recognising the opportunity. Also, the Chinese government supported this by making mass entrepreneurship and innovation the leading agenda of its economic strategy.
Closer home, India is quickly catching up. Despite the many challenges, India does not suffer from the want of the entrepreneurial spirit. With the launch of the ‘Digital India’ enterprise, reality will meet aspirations, and more start-ups are estimated to emerge.
So, does an entrepreneurial spirit help drive the economic growth of a nation? One can’t really say. There is no conclusive evidence to support or contradict this statement. This, however, does not undermine the relevance of start-ups in the business ecosystem. And the spate of business centres and shared office spaces that are springing up clearly to do what they can to support this start-up wave.