According to the author, the new combinations are better approaches to fulfil customer needs, developing new products and creative destruction to some extent. Now based on the notion of creative destruction, the theory of long waves (regarding the economic growth and business cycles) has been formulated. The theory states that a business cycle comprises of creation of new products and services along with the implementation of new strategies. These phenomenons ultimately lead towards the growth of national economy and create new employment opportunities.In the context of empirical literature, economic growth and entrepreneurship can be linked in different ways. In order to cite an example, one way of linking economic growth and entrepreneurship can be the measure of entrepreneurship in the context of comparative share of economic activities accounted by the small companies. On the contrary, some studies take into account the number of market participants (intensity of competition) and the self employment rate.There are large numbers of cases where entrepreneurial activities have played major roles in developing a country’s economy. The case can be best described with the development of Hong Kong. With the opening up of new SMEs in Hong Kong, the country has been able to ensure huge economic developments. In a short span of time the country succeeded to staggering growths in the per capita income. The average annual growth of the country also witnessed similar growth in short a span of time.Therefore from the findings of the literature study it can be stated that Entrepreneurship & Economic Development are closely related with each other. In other words, entrepreneurship highly contributes towards the development of the national economy.SMEs are the integral part of a country’s economy and the flourish of an economy is highly dependent upon the progress of the SMEs. Apart from the development of the national economies, SMEs also play a major role in generating new employment opportunities within the country. Hence, this sector is of utmost importance from the point of view of a nation. A few decades ago, the governments in various countries hardly paid attention towards the development of SMEs. However, in the recent past there have been drastic changes in the government’s outlook to small and medium business sectors of the nation.The government of these countries now have a
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