Explain the role of entrepreneur in earning foreign exchange?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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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.

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