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The Importance of Entrepreneurship to the Economy - 4 BIG Reasons You Didn't Know!
The entrepreneurial activity of any society determines the level of its success and prosperity. This statement has proven itself over the course of human history.
This is why people with entrepreneurial instinct are vital to the economy of any country. Entrepreneurs activate and stimulate all types of economic activity, which means that the country's economic success, growth, and opportunity comes down to how well it encourages and rewards its entrepreneurs.
The most dynamic societies are the ones which recognize the importance of entrepreneurship to the economy and view them as playing a central role in all the country's economic activity, as opposed to those who consider entrepreneurs to be a small part of the whole system.
This is because the creativity, motivation, and overall entrepreneurial energy are what triggers the production, marketing, and sale of products and services. It's the entrepreneurs who undertake the risk in search of profitable enterprises that satisfy people's needs.
When they succeed in their innovations, it changes the way everyone lives and works and improves the standard of living as well as adding to the creation of wealth.
4 Reasons Why Entrepreneurs Are Vital to Society
1. Drive Economic Growth
Entrepreneurs create new business which increases wealth that is eventually distributed to people in different ways. From business owners, suppliers and financiers to distributors and other players, everyone benefits from the wealth created.
Through their new ventures, entrepreneurs add to the national income by generating wealth. Whereas existing businesses may be confined to the range of existing markets and possibly hit the glass ceiling income-wise, entrepreneurs are able to develop new markets and create new wealth with a range of new and improved technology, products, or services.
2. Big Investment and Job Opportunities
Each new successful business produces a lot of additional investment and entrepreneurial opportunities. The initial activity may serve to inspire a whole new generation of business entrepreneurs and create a breeding ground for unique new business ventures. If you're an investor, you'll want to read our article on Digital Real Estate to learn more.
Entrepreneurial undertakings also create a variety of job opportunities and bring about the conditions necessary for a prosperous economy. The entrepreneurs' trailblazing in the form of producing new goods and services creates a cascading effect and stimulates related business and sectors, which further boosts economic development.
3. Drive Social Change
Another factor which highlights the importance of entrepreneurship to the economy is that it raises the living standards for everyone by enabling high-quality goods and services to be produced and sold at reasonable prices.
With their unique offerings, entrepreneurs create social change and help people become less dependent on obsolete systems or technologies. This leads to improved morale, greater economic freedom, and ultimately, an improved quality of life for everyone.
4. Community Development
A lot of entrepreneurs regularly invest in various community projects and help to nurture ventures from like-minded individuals. Many also provide local charities with financial support which helps to foster even more development beyond their own entrepreneurial ventures.
Entrepreneurs like Bill Gates use their money to help finance a lot of good causes in different industries including education and public health. It's fortunate that the very same qualities which make someone an entrepreneur are the ones that motivate them to pay it forward.
The Flip Side of the Coin....
Now that we've seen the importance of entrepreneurship to the economy, the question is whether there are any drawbacks to encouraging entrepreneurs.
For instance, are there limits to the number of entrepreneurs that a particular society can hold?
There are certain examples where an extremely high level of self-employment has proven to be inefficient in the society's economic development. Italy is one of the countries that have, in the past, suffered from negative impacts on the growth of the country's economy due to self-employment.
But What is The Role of Government in all This?
As previously mentioned, the countries that experience the most explosive economic growth are those that recognize the importance of entrepreneurship to the economy. Regulation plays a vital role in helping to nurture entrepreneurship, but a fine balance must happen. A fine balancing act on the government's part must occur.
Unregulated entrepreneurship could lead to a host of unwanted social outcomes such as unfair market practices, financial crisis, pervasive corruption, and criminal activity. Moreover, too much regulation stifles growth too.
The Benefits of Entrepreneurship - Why Become an Internet Entrepreneur?
As an entrepreneur, you are vital to the success of any society, and whatever your reasons for becoming self-employed, whether it's to bring life to your ideas and visions, or to create higher income for yourself, starting a business gives you the following benefits:
Being Able to Pursue Your Own Dreams.
Each one of us has our own vision and view of the world, and becoming an entrepreneur is the only way of ensuring the fruition of your ideas. With self-employment, you're able to do your own thing and focus on the things that you are passionate about.
Flexible Control of Your Own Time.
As an entrepreneur, you're your own boss which means that you work when you want to and you get to stop when you feel like it. You can align your work with your lifestyle and be able to accommodate all the tasks that you have to do however you please.
You have freedom from rules and you can opt to do your work in your pajamas with the TV on or on the beach with friends and family. A whole range of possibilities open up to you when you choose the path of self-employment.
The Opportunity for Learning and Gaining Sound Wisdom and Knowledge.
Most entrepreneurs wear different hats – from strategic planning, marketing, and customer service to sales, and even bookkeeping. There are lots of things that you're going to learn along your entrepreneurial journey. Everything from personal growth to business experience. This serves to enrich your character and grow your soul. Very fulfilling.
Vast Earning Potential
No matter how hard you work, if you're an employee, then your financial remuneration is limited to the salary you earn, and maybe the occasional bonus. In fact, as an entrepreneur, you can earn a whole lot more. Limitless income with the right idea! Your financial reward potential is significantly higher as a self-employed person than as a corporate individual.
You Have a Chance to Give Back
As an entrepreneur, you have the opportunity to share your learning with others. If you're an employee in a corporate environment, you're working for others. This means that you're simply a cog in someone else's machine. Your opportunities to give back at home to your family and your community are severely limited.
In fact, your employers could claim your success as theirs. Ever had this happen? But, as a business owner, you can teach others everything you've learned. This is a wonderful way of giving back to your community.
A lot of entrepreneurs do this by either talking about their experiences, mentoring others, writing books to show them how they did it, or any other ways of inspiring and motivating others. The most successful entrepreneurs find joy in giving back which in turn fills their lives with rich experiences.
The Role of an Entrepreneur
- Accepting business risks and uncertainties to satisfy consumers' needs
- Mobilizing and allocating resources such as raw materials, equipment, facilities, or funds
- Management of employees and the daily operation of the business
- Making sure that business objectives are achieved, and providing marketing efficiency
- Ensuring that the customers' needs are met
- Making sure that the government's laws and regulations are followed
- Ensuring a high return on investment for the organization
- Taking care of the grievances, goodwill, and reputation of the business
- Processing relevant business marketing metrics and turning them into actionable intel to make better business decisions and find more opportunities.
These various roles highlight the importance of entrepreneurship to the economy, but what exactly does it take to become an entrepreneur? What are the common characteristics of all successful business people?
The Core Personal Competencies of Successful Entrepreneurs
- Display Perseverance in Spite of Failure
- Confidence to go after their Dreams
- Self-Sufficiency and Self-Discipline
- Risk Management Skills
- Tolerance of Ambiguity
- Ability to Turn Obstacles into Opportunities
- The Ability to See the Bigger Picture
- Intrinsically Motivated
One thing's for sure, as an entrepreneur, you will never get bored!
Each day brings with it new and exciting challenges. There are new discoveries and new tasks everywhere you go. Moreover, all you have to do is to set your own pace and then enjoy the journey.
So What's the Bottom Line on the Importance of Entrepreneurship to The Economy?
At Sirius, we believe Business owners, development institutes, policy-makers, charitable donors, and change agents all understand the importance of entrepreneurship to the economy.
The bottom line is that this interaction between entrepreneurship and economic development presents a lot of benefits. Furthermore, a balanced approach is required to ensure that entrepreneurship results in a positive impact on a country's economy.