Entrepreneurs are vital to the progress of the a country’s economy. These small business owners are instrumental to improvement of the nation. Especially in times of recession, their business activities help spur economic activity and encourage exchange. Entrepreneurs, therefore, serve an important purpose in our society by contributing to the improvement of the economy in a number of ways.
5 Reasons Why Entrepreneurs Improve the Economy
- Entrepreneurs create businesses that hire people. This is the topmost reasons why entrepreneurs improve the economy. Their businesses require a number of employees to help them run the business; from accountants to computer programmers to human resource staffs all businesses have them.
Entrepreneurs provide their employees a steady job and income. The workers’ income puts food on the table and feed their family members. The same income will be needed to be able to buy necessities such as food, clothing and shelter. This in turn will help spur the economy and provide necessary jobs and businesses for people that meet these basic needs.
For those who earn a lot more, they can now afford to spend on luxuries such as vacation, jewelries and concerts. This will benefit the people working or providing these kind of businesses.
2. Entrepreneurs pay taxes. The small businesses that the entrepreneurs established are required to pay necessary local, state, and/or the federal government taxes. The tax dollars from the businesses will be used by the government to provide people with basic services such as health care, transportation, education, construction and so many others.
3. Entrepreneurs create demand for products which in turn create jobs and other businesses. Entrepreneurs need to buy products in order to produce finished goods. They need raw materials. Sometimes these raw materials are finished goods themselves, for instance gold.
Buying raw materials for their businesses will create other businesses which in turn create more jobs. For example, it is necessary for fashion designers to buy silk fabrics, so they go to silk fabric suppliers. These suppliers may require workers to keep tract of their inventories and orders. And the cycle goes on and on, further stimulating the economy.
4. Entrepreneurs introduce new technologies to the market. This is the disclosive nature or history-making practices of entrepreneurs. They come up with new technologies, create new products and provide new services. Steve Jobs, the founder of Apple Computers, introduce us to Mac and iPod. Bill Gates founded Microsoft. The works of these two individuals led to the creation of millions of other software programs that we see today.
5. Entrepreneurs stimulates the economy by instilling confidence in people. The economic health of a nation generally depends on its GDP (Gross Domestic Product) performance. Entrepreneurs, through the jobs and businesses they create, are vital to the GDP equation. Having a health economy makes people confident to invest, live and work in that place even in times of recession.