Entrepreneurs are frequently thought of as national assets to be cultivated, motivated and remunerated to the greatest possible extent.
Entrepreneurs can change the way we live and work. If successful, their innovations may improve our standard of living. In short, in addition to creating wealth from their entrepreneurial ventures, they also create jobs and the conditions for a prosperous society.
The following are six reasons why entrepreneurs are important to the economy.
Entrepreneurs Create New Businesses
Path breaking offerings by entrepreneurs, in the form of new goods & services, result in new employment, which can produce a cascading effect or virtuous circle in the economy. The stimulation of related businesses or sectors that support the new venture add to further economic development.
Businesses in associated industries, like call center operations, network maintenance companies and hardware providers, flourished. Education and training institutes nurtured a new class of IT workers offering better, high-paying jobs. Infrastructure development organizations and even real estate companies capitalized on this growth as workers migrated to employment hubs seeking new improved lives.
Similarly, future development efforts in underdeveloped countries will require robust logistics support, capital investment from buildings to paper clips and a qualified workforce. From the highly qualified programmer to the construction worker, the entrepreneur enables benefits across a broad spectrum of the economy.
Entrepreneurs Add to National Income
Entrepreneurial ventures literally generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit the glass ceiling in terms of income. New and improved offerings, products or technologies from entrepreneurs enable new markets to be developed and new wealth created.
Additionally, the cascading effect of increased employment and higher earnings contribute to better national income in form of higher tax revenue and higher government spending. This revenue can be used by the government to invest in other, struggling sectors and human capital.
Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain Through their unique offerings of new goods and services, entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies. Overall, this results in an improved quality of life, greater morale and economic freedom.
For a more contemporary example, smartphones and their smart apps have revolutionized work and play across the globe. Smartphones are not exclusive to rich countries or rich people either. As the growth of China’s smartphone market and its smartphone industry show, technological entrepreneurship will have profound, long lasting impacts on the entire human race.
Moreover, the globalization of technology means entrepreneurs in lesser-developed countries have access to the same tools as their counterparts in developed countries. Since they have the advantage of a lower cost of living, a young entrepreneur from a developing country can compete with products from a blue chip industry from a developed country.
Entrepreneurs regularly nurture entrepreneurial ventures by other like-minded individuals (Social responsibility). They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.
Some famous entrepreneurs, like Bill Gates, have used their money to finance good causes, from education to public health. The qualities that make one an entrepreneur are the same qualities that motivates entrepreneurs to pay it forward.