Explain the role of entrepreneur in earning foreign exchange?

Expert Answers

An illustration of the letter 'A' in a speech bubbles

Entrepreneurs who offer their products and services to the international market positively contribute to the foreign exchange earnings of a country. If a country’s private sector exports many products, there will be a growth in foreign exchange earnings. Entrepreneurs with small and medium-sized businesses can also play a role in foreign exchange earnings because the internet has paved the way for online business platforms such as retail stores, which can be marketed internationally.

On the other hand, entrepreneurs who have businesses that solely focus on exports generate foreign exchange earnings as they constantly work towards increasing their profits. It is noteworthy that entrepreneurs also help to conserve foreign exchange reserves by producing goods for domestic use, which reduces the need for imports.

Approved by eNotes Editorial Team
An illustration of the letter 'A' in a speech bubbles

Foreign exchange is earned when foreigners want to buy something from a given country.  Entrepreneurs can help to make this happen in two major ways.

First, they can devise ways in which to create goods or services that people in other countries want to buy.  They can, for example, produce goods or services more cheaply than can be done in other countries.  When foreigners buy these goods or services (exports), foreign exchange flows into the country.

Second, if the entrepreneurs are successful enough, they may attract foreign investors.  The investors will be buying shares in the company.  In this case too, foreign exchange will flow into the country as foreigners buy local currency to use to buy the shares in the company.

Approved by eNotes Editorial Team