Can you imagine the world today if it wasn’t for entrepreneurs like Bill Gates, Jeff Bezos, Mark Zuckerberg, and others who decided to become an entrepreneur and start a business?
Entrepreneurs contribute to the economy and are the driving force of society. Without entrepreneurs, we wouldn’t have the economies and markets that we have today.
Why Is Entrepreneurship Important?
Entrepreneurship creates economic growth, which leads to many benefits for you, me, and the economy. Whether you’re at home, at work, or at a coffee shop, look around you. Everything around you was the directly result of a person who decided to become an entrepreneur. Those products have led to the creation of new industries and markets.
Businesses are in a position where they are looking to expand, creating more jobs for the community and more jobs = more money for the economy.
Improved Public Services
Higher economic growth leads to higher tax revenues which enable the government to spend more money on public services, such as healthcare, education, and more. This will lead to higher living standards, such as an increased life expectancy, a larger knowledge bank, and a greater understanding of issues surrounding the world.
When people make more money, they are more likely to spend more money on consumer goods and services for a higher standard of living.
Why Are Entrepreneurs Important
Entrepreneur importance can’t be taken lightly when it comes to economic development. Without entrepreneurs, our society and economic development wouldn’t be where it is today. To help you understand why entrepreneurs are important, we’re going to cover a number of key things that entrepreneurs provide to society.
Successful entrepreneurs contribute by investing in products and services, providing jobs for millions of people, promoting innovation (through technological advancements and efficiencies), driving economic development and growth to both the local and national communities.
Entrepreneurs Invest in Products and Services
What drives a person to become an entrepreneur?
This is something that dates back to the beginning of time – supply and demand. There is a demand for a product or service, and someone creates a product/service to supply that demand. There’s a cyclical nature of investments.
The buyer will invest in products and services provided by the entrepreneur (seller) and in creating the products and services, the entrepreneur is investing in other entrepreneurs.
To make it clearer, let’s create some friends:
- Bob the Customer – Wants to buy a cool shirt
- John the Entrepreneur – Sells cool shirts
Bob has a demand for a cool shirt and luckily, John sells cool shirts. But in order to make a cool shirt, John needs a design, a printer, and a shirt. John the entrepreneur is now going to invest in products – shirt and printer. John will also invest in graphic design services.
Going another level down, the entrepreneurs who make the shirt, printer, and design will also need to invest in other products and services to provide their products and services.
All parties are positively impacting the economy through all levels of the economy.
Entrepreneurs Invest in Other Entrepreneurs
Investments don’t come from just products and services, but also with investment in other entrepreneurs. Each new entrepreneur will, in turn, create new business opportunities for others.
Many entrepreneurs who have done well, will invest in and support others because investors had supported them.
Investment and Supply Causing Productivity
Investing in the workers of your company can also be hugely beneficial. Nowadays we see major companies offer programs to find internal personnel who have the potential to become future leaders of the company.
Developing and mentoring your own staff is ideal because these are employees who already work for the company and understand what the company is all about. This not only creates jobs, but it ensures the company has a strong foundation with long-term employees. Both of these work hand in hand, fuelling economic growth.
Entrepreneurs Create New Jobs
When you start a business, you want to do everything yourself to minimize expenditure costs. However, you soon find out it all could be too much or you may not be as good at something as you thought you might have been. Therefore, a very important role in building a company is delegation.
Delegation means hiring employees to handle tasks so you can handle everything else. There are many ways that creating jobs boost economic growth.
Consumers Spending More Money
When a company provides new employment opportunities, it means more people are getting hired and making an income. This means an increase in consumer spending, which benefits businesses that rely on consumer spending. Therefore hiring employees can not only increase the value of your company, but the value of multiple other companies, hence directly leading to economic growth.
Increased Economic Growth
Simply put, the economy needs people to spend money on local businesses to thrive. Therefore unemployment rates are important. If there are high unemployment rates, the quality of living is lower and fewer people are spending money on items that are not necessities, which is bad for the economy. When people aren’t working, they’re also not out spending money.
You Can Do More With More Money
When employees of a company earn steady paychecks, they can pay back outstanding loans or debts. This will cause financial institutions in your area to be more willing to provide loans or financial help to you towards a purchase like real estate, which improves the economic landscape of the area. Therefore jobs are beneficial for everyone involved.
Hire Employees Within Reason
Hiring too many people however can be problematic for your company because the experienced workers then have to spend a lot of time training new workers, decreasing the productivity rate of your business. Therefore, you should only hire when there is a need for example if your company sales are increasing or the demand for your product is largely increasing.
Entrepreneurs Promote Innovation
New Technologies and Efficiencies
We always want to find an easier way to do something. For example, instead of manually opening your phone to listen to music, you can say “Hey Siri, play [favorite song].” Or instead of using your fingers to tap out a phone number on the phone to call someone, we say “Hey Siri, call this person.”
That’s a result of the advancements in technology, presenting us with innovative and more effective methods to live a better quality of life. In addition, the hype new products generate means that the products sell a lot more, which creates more demand and in order to meet the demand, companies will need to hire more staff.
The ability to turn ideas into new products and services that people need is essential in today’s day and age. In the past, we’ve seen periods of rapid technological growth lead to strong economic growth. While it’s good for business, it also boosts workforce creativity and quality of life.
Competition Drives Innovation
There is a positive relationship between innovation, entrepreneurship, and economic development.
Two factors which result in higher living standards are job creation and innovation, two qualities that new and emerging businesses happen to possess.
There is a constant battle between top brands – whether it is which company makes the best phone? Or which company makes the best laptops?
Companies are always improving their products and services in order to gain new customers. In improving their products and services, they’re investing money into research and development to innovate and create new technologies. These new technologies are meant to help free customers from inefficiencies and new create new ways of living.
Entrepreneurs drive economic development and growth all around the world. No country is free from the entrepreneur.
The goal of an entrepreneur is often to create a business to meet the need of the markets.
As a result of all the benefits entrepreneurs provide, aspiring business owners are motivated in their own journey, since it shows their giant ambitions can become a reality.
As well as this, successful entrepreneurs help you build an insane work ethic! Hence they indirectly contribute to the economy in this way as well, through other people becoming successful in their own line of work via the extra motivation.
In conclusion, the economy is a much better place with successful entrepreneurs than without. Not only do they provide a substantial financial contribution to society themselves, but they put thousands of others in a position to ultimately improve the economy financially.