Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2023 Vol: 29 Issue: 3S

The Role of Entrepreneurship on the Economic Growth and Development

Mahmoud Mohammad AL-Ajlouni, Northern Border University

Citation Information: AL-Ajlouni, M.M. (2023). The role of entrepreneurship on the economic growth and development. Academy of Entrepreneurship Journal, 29(S3), 1-10.


To achieve the country economic development and growth, entrepreneurship takes a central role in creating and extracting value. Entrepreneurs mostly contribute on the road to a balanced economic development through the superlative use of obtainable properties as they generate innovative dealings and occupational locations for individuals and ease in cumulative competition over the practice of IT skills, the outcome of which is efficiency, Instinctively, large systematic developments in the industrial segment generate a ration of chances for advanced businesspersons, while other entrepreneurs progressively familiarize to the measured step of scientific growth in the facilities subdivision the development of the state-run and the development of its economy. Economic evolution over entrepreneurship stem from the conversion of exclusive possessions such as, land, employment and money, into nationwide revenue and properties and facilities, representing wealth. The net national product and per capita there via increases, evidencing the dependence of economic development on entrepreneurship. Even with a considerable number of funds, a nation state may still discovery it difficult to progress its economy without entrepreneurship.


Entrepreneurship, Economic Development, IT Skills, Outcome, Efficiency.


Economic sustainability requests constant innovation and entrepreneurship, which is frequently demonstrated in capitals. Armed with dissimilar structures, together perceptible and imperceptible, capitals can take about or deter the efforts of entrepreneurship; this may be demonstrated by the nation of the town (a feature that is distinct to it), which could upsurge the entrepreneurial events all over a long period Afshan et al. (2021). Dedicated revisions to the subject of entrepreneurship and growth involve diverse arenas such as, macroeconomy, microeconomy, economic welfare (to name a few), at numerous geographic and area stages Aquino et al. (2018). Based on the country level, an evaluation of the macro-economic possessions of entrepreneurship through 26 OECD nation state was conducted via Bahrini & Qaffas (2019), and found the rate of equilibrium of solo self-employment to be independent of the economic progress stages and both positive and negative rate of eccentricities from balance would minimize growth level. In a parallel line of study, Bansal et al. (2022) showed that the economic independence points are the top forecasters of entrepreneurship on the basis of their checkup of 70states. Moving on to the regional level, common of studies of the same caliber focused on the part enjoy yourself via entrepreneurial bionetworks Bauwens (2021). In this study, the outcome of entrepreneurship on economic growth in five Jordanian companies is measured, with the country framework, namely culture, geography and institution, examined as the moderating concepts. The next section presents a examination of related literature on the association amongst entrepreneurship and economic growth and literature’s measurement of entrepreneurship.

Literature Review

Entrepreneurship overall increases and enables the evolution of the economy over its accepted advanced section. Moreover, entrepreneurship is sponsored over the administration of capitals in dissimilar new habits via businesspersons (Bresciani et al., 2021). Such advanced advance kind has a biological landscape associated to the kind of evolution that is reliant on on bodily principal. Nonetheless, entrepreneurship may, in some suitcases, deter economic development. Obviously, as a widely rummage-sale terminology, entrepreneurship may attract more currency and individuals than it warranties, as an outcome of which, unreasoning allocation of resources succeeds. Also, the ecosystem may disturb the link among entrepreneurship and monetary growth. Scholarships have observed the bionetworks in sunny of their mechanisms, situations and progressions together in system and experimental behaviors to regulate what encourages or deter in entrepreneurship Dhahri et al. (2021). Between the revisions, Isenberg Doern et al. (2019) planned six significant business ecosystem mechanisms and they are, procedure, money, philosophy, cares, human assets and marketplaces, nevertheless the World Fiscal Opportunity El-Haddadeh et al. (2021) exposed that entrée to marketplaces, social and monetary capital that of excellence are helpful circumstances for entrepreneurial accomplishment. In a newer study (Fan et al., 2021) obtainable the technical construction of an academic ecology, collected of three coats, specifically recognized preparations, reserve awards and productivity, in the form of creative entrepreneurship – this displays that entrepreneurship can be measured as a singularity that stalks from compound schemes. On the additional pointer, the ecology may similarly act as a controlling adjustable in the entrepreneurship-development association Hooks et al. (2022). On the full, the ecosystem may encourage entrepreneurship or be the foundation upon which the entrepreneurship-economic result is constructed.

With regards to the dimension of entrepreneurship, scholars commonly accept five opinions of view namely, self-employment, new firm creation, early-stage entrepreneurship, necessity entrepreneurship and chance entrepreneurship Igwe et al. (2021). Both self-service and new secure construction are valid to any entrepreneurship research, however the outstanding three have are appropriate to separate emphases. In spirit, entrepreneurship raises to the formation of somewhat new; for example, self-engagement or sole proprietary that indorses novelty. When protracted, self-employment might main to original firm creation, which is a main measured seeing novel manufacture devices are frequently showed thru the firm. Touching on to initial-phase entrepreneurship, it reproduces the dangerous lifecycle and demise passé of entrepreneurial exertions and is measured to be a main development motorist, diffusor of knowledge and maker of occupations Khalil et al. (2022). Furthermore, inevitability and chance entrepreneurship elucidate the reasons and outcomes of numerous entrepreneurship categories. Definitely, need entrepreneurship shows the absence of improved substitute job optimal of the businessperson, though chance entrepreneurship specifies that leveraging of a business chance thru the businessperson. Added to the above, entrepreneurship dimension can be accepted out tortuously using origination or over opposition Khan et al. (2022).

Literature revised show that that common of educations absorbed on the entrepreneurship-economic development connection that attentive on the economic expansion phase of the country and exposed that entrepreneurship (business ownership) and GDP has a U-shaped linking, whereas others Klofsten et al. (2019) designated that entrepreneurship regulates the development of the budget, albeit this was unnoticed via the neoclassic development model, connecting labor and wealth only to output. Such educations resisted that entrepreneurship definitely influences economic development concluded entrepreneurship investment and they maintained for it to be comprised into economic evolution models. Consequently, in another associated study, according to Koomson et al. (2022) secondhand data discarded from German sections to survey the connection amongst diverse entrepreneurship principal kinds, such as, the amount of start-ups comparative to populace, start-up activity in high-knowledge ICT businesses, and start-up movement in the ICT industries, in light of their connection to economic development. They analytically found an optimistic affiliation amongst entrepreneurship and economic routine, with entrepreneurship capital being mentioned to as the whole issues manipulating and starting the economic situation, in a way that it enables the start-up of new-fangled dealings. The writers further worried on the community strategy and its elevation of entrepreneurial investment, and its optimistic influence on the presentation of the budget.

In this respect, discussions abound amongst the memberships of academic world and representatives as to the influences lashing economic development of a country/region, which has advised investigators to essence on entrepreneurship and to scrutinize its consequence on economic development. For instance. Muhmad & Muhamad (2021) showed an experimental check of the equal to which entrepreneurship enable the growing of the cheap and they originate that sideways from the savings in research and human wealth, entrepreneurship definitely pretentious economic evolution. In a similar manner, Rippa & Secundo (2019). examined the consequence of entrepreneurship on monetary growth, seeing the exportation alignment of afresh shaped businesses. They exposed an optimistic consequence of entrepreneurship on financial development, although export position underwrote in an additional way to the concluding. Moving on to another study, Shamout et al. (2022) carried out an experiential inspection and examination of the implication of entrepreneurship (gauged finished the rate of self-employ) towards monetary growth, by means of data gained from 10 private sectors. Founded on their consequences, information-based entrepreneurship energies economic growing decided that entrepreneurship transport about information spill-over, after which this indorses financial evolution.

In the similar line of education, Skare & Soriano (2021) create a adjacent affiliation amongst entrepreneurship, revolution, and economic evolution, with the first two contributive to amplified economic events, and the development encouraging happenings associated to them. The authors highlighted an honorable cycle amongst the variable quantity, with each of the three variable stars having optimistic influence on each other. Also, Su, et al. (2021) originate a momentous entrepreneurship-economic growth association via institutional environment excellence, by means of data found from 25 EU republics for the old-fashioned straddling from 2006 to 2014. Their conclusions presented that the recognized environment excellence encourages creative entrepreneurship, which would then enable the growing of the economy. The authors touched to the deduction that entrepreneurship has an optimistic result on economic development, with the top forecasters of the previous being monetary constancy, administration size and apparent entrepreneurial facilities for business start-ups.

Role of Entrepreneurship in Economic Development

Prosperity Formation and Distribution: Entrepreneurs capitalize their incomes and fascinate principal (e.g., debt, equity) over the formation of their productions. Such possessions can be gained from stockholders, financiers and the communal, hence, lashing public means, despite the fact permitting the individuals to assistance from professional accomplishment. This mutual capital kind that stems from the formation and spreading of wealth is a pre-requisite and area of economic expansion.

Generate Occupations: Businesspersons obviously generate occupations rather than looking for for careers, with the unpretentious description being that on one occasion a specific converts a magnate, the economy is one less work hunter, and engagement can be finished for numerous work explorers, which is a kind of job expansion.

Encourages Investment Creation: Through marshalling the public investments, entrepreneurs basically encourage investment creation, which is critical for the expansion of the productions and the budget of a state.

Creates Large-Scale Employment Opportunities: Over entrepreneurship, entrepreneurs enable great gauge work occasions which continue a determined delinquent amongst emerging and under-advanced countries.

Promotes the Balanced Regional Development: Regional disparities if minimized or eradicated via entrepreneurs as they establish industries in less developed nations and regions.

Decreases Attention of Summary Economic Influence: Manufacturing and business events produce economic power naturally.

Wealth Creation and Distribution: Entrepreneurship drive equitable wealth and income distribution towards the betterment of the country.

Increases Gross National Product and Per Capita Income: Entrepreneurship start with leveraging chances and clarifying them, next which possessions, in the form of principal and talent, are prepared.

Advances the Usual of Existing: Entrepreneurial happenings advance the existing ideals of individuals, which is one of the features of the state’s expansion.

Encourages Nation state Transfer Employment: The state’s transfer employment is improved over entrepreneurship, which is alternative representative of the nation state economic progress.

Producing Novel Dealings: Segments and industries are inspired over entrepreneurs past innovative projects.

Facilitates Overall Development: Entrepreneurs catalyze change which has a undulating consequence and once formations are set up, economic development instigates.

Makes Innovation: Entrepreneurs’ exploration for deviations sidewise from the amalgamation of construction features and contemporary novel designs and new features grouping.

Allocates Capital and Asset: Entrepreneurship promotions and enables optimum circulation of affluence and venture during the nation state.


The main neutral of this paper is to check the effect of entrepreneurship on economic progress the method approved is complete as follows;

Research Design

This study accepted the logical positivism standard to spread over the research conclusion visibly and outside the work state of affairs, confirming independence beginning partiality. This is a situation learning that offers detailed sympathetic of the Private sectors systems, where statistics is grouped concluded planned questionnaire. The explore usages mutually main and subordinate statistics to accomplish the points. The targeted enterprises consist of private sectors with a minimum capital of N5,000, employing 50 employees. The study adopts a simple sampling system shows in Table 1.

Table 1 Main Private Sectors in Jordan
S/No High Significance Medium Significance Low Significance
1 Medical sector Medical needles drugs
2 Industrial sector Agro Allied Livestock
3 Textile sector wood products  
4   natural food sector  
5   Service industry  

Sample Size and Sampling Techniques

The size of the sample was obtained from the list of managers, senior executives and middle management of private Companies. A total of 500 respondents were selected through simple random sampling, based on probability sampling, after which the sample was stratified to ages 26 years and over, with 5 years being the least working experience, and a degree being the least academic qualification. Four-hundred questionnaire copies were distributed, from which 477 copies were retrieved, indicating 95.3% rate of response. Specifically, 23 copies were excluded for improper filling, but the remaining 477 copies were deemed very good and sufficient for the research, representing each population unit, and minimizing sampling error shows in Table 2.

Table 2 Reliability Coefficient of the Instrument
S/N Item No of item Alpha (α) coefficient
1 Entrepreneurship and economic growth 8 0.868
2 entrepreneurship development and job formation 7 0.905
Overall 15 0.868

Pilot Study and Assessment of Reliability and Validity

The items in the questionnaire were checked and modified via the author’s supervisor and several Department officials in the private sectors to ensure satisfied legitimacy. Besides, the author also directed a model test via 25 respondents to start reliability of the instrument, which is devoted to as the level to which the results remain consistent over time, accurately depicting the total people under checkup. A dependable instrument is one in which the study outcomes can be replicated via the similar technique, and it delivers an awareness of duplication, repeatability or reliability of explanations /conclusion. Accordingly, the reliability test Cronbach’s Alpha (α) was used, and the general reliability coefficient charge was initiate to 0.866 (85.6%) of the whole items. Henceforward, this recognized the consistency of the instrument Sun et al. (2020).

Data Analysis

Under this section, the analysis of the answers from the questionnaire is conversed. Data is used to show the examination conclusion, using a 7-point Likert scale to measure the substances. The researcher managed the questionnaire replicas to the defendants, and the found statistics was uncovered to Illative Statistics Simple Regression Analysis for data analysis. The analysis was conducted using SPSS and the hypotheses were verified at the 5% significance level. The entire analyses were based on data obtained from 377 respondents.

Results and Discussion of Findings

Testing the first hypothesis, “There is no significant relationship between entrepreneurship development programs and economic development” shows in Table 3.

Table 3 Simple Regression of the Relationship between Entrepreneurship Development Programs and Economic Development
Economic development. Coefficients P-Value
Entrepreneurship Development Programmers 0.268 0.030
R Square 0.289
F-test 18.680(0.000)

Based on the results of the above table, the hypothesis that no significant relationship exists between the development of entrepreneurship programs and economic development, was rejected owing to the probability value of less than 5%. Thus, the alternative hypothesis is accepted.

Testing the second hypothesis, “There is no significant relationship between entrepreneurship development programs and job creation” shows in Table 4.

Table 4 Simple Regression of the Relationship between Entrepreneurship Programs and Job Creation
Creation Coefficients P-Value
Entrepreneurship Growth Programmers 0.263 0.019
R square 0.31
F-test 28.83(0.000)

The above table indicates no support for the hypothesis that states the absence of significant relationship between entrepreneurship development programs and job creation, as the probability value is lower than 5% and thus, the study accepts the alternative hypothesis.

Discussion of Findings

The objective of this study is to survey the outcome of entrepreneurship expansion plans on economic progress in Jordan. The hypothesis test conclusions displayed provision for the important affiliation amongst entrepreneurship expansion programs and economic advance, which is a result dependable with respects to the additional hypothesis, the outcomes excluded the absenteeism of substantial affiliation amongst entrepreneurship advance plans and job conception.

Summary and Conclusion

This study determined the impact of government entrepreneurship growth on economic development and job creation. Based on the results, the transformation of new ideas to product/service through entrepreneurship result to reduce the unemployment rate, increased capacity of productivity, enhanced experienced, increased living standards, increased government efforts towards development entrepreneurship, government provision of technical assistance for industrial development and the overall economic development. Job creation increases the productivity of the entrepreneur to facilitate the development of the economy, which is why, it is crucial for governments and individuals to create job opportunities and this happens to be the biggest challenge in the current business world.

In addition, reduce unemployment rate refers to the entrepreneur’s mental ability to manage opportunity and the lack of entrepreneurs in the country could lead to abject poverty, which is why innovation and creativity needs to be nurtured in individuals in order to positively influence the community and the whole country. Entrepreneurship development leads to job creation, urging people to improve their lives and the whole economy. Accesses to socio-economic opportunities, suitable technologies and foreign markets, technological innovations and the minimization of poverty are all brought about through job creation and business environment characteristics, which would contribute to economic development. Thus, the newly established Companies would significantly contribute to job creation. The results additionally have wide-ranging system tips regarding the placement of nurturing entrepreneurship to inspire monetary progress. However, as properly climax a crucial matter. Entrepreneurial movement, in and of the situation, isn't sufficient to inspire monetary progress. Optimistic entrepreneurial insolences and objectives in a country are extra imperative. Typical plans and laptop programmer, meant at encouraging tactical hobby concentrating precisely on unique corporation improvement, might not be ok to inspire progress. The system emphasis necessities to switch from cumulative the wide variety of businesspersons to concentrating at the arrogances and cost (e.g. boom objectives) of gadgets and closing marketers. More nuanced techniques, which train humans in wide-ranging approximately the recognition of entrepreneurship and inspire a encouraging expertise of entrepreneurship, are desirable. This can also incorporate techniques that motive to upsurge revel in to entrepreneurial component representations (i.e., networking) and reduce the consequences of entrepreneurial unhappiness Entrepreneurship is measured essential to an lively economy. Entrepreneurs generate engagement probabilities now no longer best for themselves however for others too. Entrepreneurial movements can also additionally effect a nation’s monetary presentation thru fetching modern goods, processes, and advent processes to the marketplace and with the aid of using boosting productiveness and opposition extra broadly. Realizing those blessings calls for companies that donate to an placing this is approachable to marketers. In specific, it's far crucial to hold highbrow and different assets rights, streamline and implement business legal guidelines, enhance the enterprise temperature, lower controlling loads, and generate a cost of any other chances for marketers who be unsuccessful. More specifically, the subsequent coverage measures have to be taken into consideration: • Government guidelines and regulation on assets rights are crucial in shaping a country’s innovativeness. Protecting fabric assets rights guarantees that any wealth advent remains with the entrepreneur, at the same time as defensive highbrow assets rights fosters entrepreneurship and innovation. Bureaucratic limitations constrain innovation-pushed sports in lots of economies. Entrepreneurial possibilities can be more in deregulated economies with freely working markets and green licensing, due to the fact marketers can function flexibly and their entrepreneurial sports can reply to modifications withinside the marketplace. It is likewise crucial that legal guidelines and guidelines be enforced pretty and evenly. • Administrative burdens for start-ups want to be low, which includes the time had to sign in a enterprise, the wide variety of bureaucratic steps, and the wide variety of guidelines, fees, and reporting necessities. As a benchmark, main business friendly international locations permit businesses to sign in for enterprise inside one day, without the want for normal renewal. This may be finished with the aid of using putting in place a modern on-line e-management for all widespread businesses. • Conflicting regulation creates uncertainty, and uncertainty discourages enterprise hobby. Codification way bringing all amendments to a given law, followed at exceptional times, right into a unmarried criminal code. Swift and complete codification of the regulation removes contradictions. It has to additionally encompass lowering and unifying administrative processes referring to a specific hobby. • In many international locations, a unmarried failed enterprise attempt manufacturers someone for lifestyles as a loser. The contrary revel in withinside the US, in which marketers are extra quite simply given a 2d chance, even following a bankruptcy, makes clean that destigmatizing failure is critical to the improvement of a wealthy entrepreneurial way of life. Creating the sort of way of life additionally reduces the concern of failure, which continues to be the maximum crucial obstacle to entrepreneurship. • The bad consequences of layoffs in companies which might be not able to compete may be eased with the aid of using enhancing seek alternatives for brand new jobs and with the aid of using assisting vocational education for employees who misplaced their jobs. Start-up subsidies have to be taken into consideration to foster entrepreneurial sports. These can lessen the chance of early enterprise failure. If regulatory burdens are decreased and corruption is eliminated, international locations will inspire and maintain their very own marketers or even appeal to innovators from different international locations. Thus, coverage can affect the quantity of entrepreneurial hobby maximum efficiently with the aid of using adjusting the regulatory surroundings in desire of entrepreneurship.

According to the government of Jordan has established policies and programs in order to generate employment through entrepreneurship, specifically since the structural adjustment program in the mid-1980s.


On the basis of the above conclusion, this study endorses the following;

This research inspires easy admittance of people to entrepreneurship growth capital via microfinance in Jordan. The government should deliver training programs advancing the Jordanian youth, mainly those that are prepared to contribute in the progress of the country. Entrepreneurship should be encouraged as a means to prosperity formation and enrichment of living over goods/service manufacture.

This study also recommends that entrepreneurship be developed via inculcating the field into the curriculum of schools to promote human empowerment and development, acquisition of entrepreneurial assistances and training. Businesses’ proprietors need to work in partnership with research practicalities to exploit and leverage research conclusions for greater scientific expansion in entrepreneurship. The National Companies Commission can support this thru authorizing all Jordanian private companies to establish entrepreneurship development centers and include two compulsory courses on the topic for undergraduate students, nevertheless of the ground they are perusal in for the own good of the complete economic expansion.


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Received: 06-Feb-2023, Manuscript No. AEJ-23-13110; Editor assigned: 07-Feb-2023, PreQC No. AEJ-23-13110(PQ); Reviewed: 20-Feb-2023, QC No. AEJ-23-13110; Revised: 22-Feb-2023, Manuscript No. AEJ-23-13110(R); Published: 25-Feb-2023

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