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State and explain the economic reasons why entrepreneurship is important to the development of the Irish economy - Leaving Cert Economics - Question b - 2012
Question b
State and explain the economic reasons why entrepreneurship is important to the development of the Irish economy. State and explain three means by which the Irish G... show full transcript
Worked Solution & Example Answer:State and explain the economic reasons why entrepreneurship is important to the development of the Irish economy - Leaving Cert Economics - Question b - 2012
Step 1
State and explain the economic reasons why entrepreneurship is important to the development of the Irish economy.
Answer
Entrepreneurship plays a crucial role in the economic development of Ireland for several key reasons:
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Creates Employment: Entrepreneurs are instrumental in establishing new businesses that create jobs, thereby providing viable employment opportunities for the labor force and helping to reduce unemployment rates.
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Organises Production: They efficiently organize resources and factors of production into operational units, ensuring an effective process of goods and services delivery.
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Innovation: Entrepreneurs drive innovation by introducing new products and services to the market, improving the quality of life and ensuring that the economy remains competitive.
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Encourages Investment: As entrepreneurs invest their capital and skills into the economy, they inspire further investments which create a culture of entrepreneurship, fueling economic growth.
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Revenue for the Government: New businesses generate tax revenues for the government through various taxes such as corporation tax and income tax, which can be reinvested into public services.
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Creates Wealth: Successful entrepreneurs contribute to wealth generation in the economy, which leads to increased GNP, reflecting overall economic health.
Step 2
State and explain three means by which the Irish Government could encourage entrepreneurship in Ireland.
Answer
The Irish Government can adopt several strategies to foster an entrepreneurial ecosystem:
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Enterprise Education: By promoting enterprise education in schools and colleges, the government can cultivate a culture of entrepreneurship from a young age, equipping individuals with the skills and knowledge needed to start their own businesses.
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Taxation Policies: Adjusting corporate tax rates to be more favorable can incentivize individuals to start new businesses by enhancing the potential profitability of entrepreneurial ventures.
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Government Policies/Regulation: Reducing bureaucratic regulations and providing grants or incentives can lower the barriers to entry for new businesses, encouraging more people to take the initiative to become entrepreneurs.