In my last post I talked about capital as a factor of production which has a lot of importance attached to it.
Today I will be talking about how Entrepreneur, labour and land as a factor of production and the role they play.
Just like Capital, Entrepreneur is also another major important factor of production. Though the importance it has is usually understimated but it can't be denied.
Without the entrepreneur, production may not take place at all. If capital is not available, the entrepreneur particularly in a one-man business, will have to look for it even if it means going to the bank to borrow the money to buy the necessary fixed assets like machinery, factory buildings and even land, which is a factory of production in itself and a gift of nature.
Labour has to be recruiter, organised and supervised effectively to achieve the desired output. It is the entrepreneur who effects the factor-mix i.e it is he who knows the right proportions in which the other factors should be combined to achieve optimum output level.
All other factors of production are inert. The entrepreneur is the activator and the organiser before any finished product could be got. This clearly reveals the importance of the entrepreneur in the process of production.
Labour is vital before any production could be carried out even when all other factors are present. It is the human beings that supply the productive power for the purpose of producing goods and services that is referred to as labour.
The entrepreneur could direct, instruct, organise, supervise and control the workers for production, but the real mental and physical operation which result in the production of goods and services is carried out by the workers who are paid wages or salaries. Therefore, labour is also very important in the process of production.
Land, which is a gift of nature, has to be examined at this juncture. Land plays a very crucial role in the process of production. It is on land that factories are built. It is on land that roads are built. Land in economics means more than the physical earth. It includes all materials contained in it like the mineral deposits. It also includes such things as air, vegetation and even rivers with what they contains.
In one way or the other, all the things that consistute land has a role to play in the process of production. Land therefore is an indispensable factor of production.
As it has been pointed out earlier, it is very difficult to take a stand as to which of them is more important than the other. And as a matter of fact, the emphasis should not be on which of them is more important than the other but on their combination in the right proportion to achieve the optimum level of output.