Importance Of Entrepreneurship To The Economy

Entrepreneurs play an important role not only to their immediate environment but also to the entire economy as a whole and we’ll today get to see the importance of entrepreneurship to the economy in an effort to understand why entrepreneurs are important to any given economy.

In looking at the importance of entrepreneurship to the economy, we’ll basically focus on the main roles that entrepreneurs play in society and how their efforts eventually contribute to the growth of the economies of their respective countries.

Importance Of Entrepreneurship To The Economy #1: It Creates Jobs

This is perhaps the number one importance of entrepreneurship to the economy. Many people often think that it’s the government’s responsibility to provide jobs and that’s why they keep crying to the government to make jobs available for them. This thinking is just dead wrong!

Every government’s job is to create a hospitable environment for entrepreneurs to run their companies and create jobs. One of the best examples I can give here is Google (Founded by Sergey Brin & Larry Page) which as a company has employed thousands of people from all over the world.

Importance Of Entrepreneurship To The Economy #2: It Contributes Towards A Country’s GDP

By setting up businesses and creating jobs, entrepreneurs are able to contribute to the GDP (Gross Domestic Product) of their respective countries and this further improves the citizens standards of living.

Importance Of Entrepreneurship To The Economy #3: It Contributes Towards A Country’s Budget

By paying taxes, entrepreneurs are able to contribute to the budgets of their respective countries and this money in turn is used to further the development of their countries.

Importance Of Entrepreneurship To The Economy #4: It Makes Use Of Local Resources

Entrepreneurs are able to utilize local resources instead of them lying around idle or worse, going to waste. They put them into good use which improves the living standards of others e.g. Using water to generate electricity (hydroelectricity).

Importance Of Entrepreneurship To The Economy #5: It Improves A Society’s Standards Of Living

By creating jobs, entrepreneurs give other people the opportunity to improve the quality of their lives e.g. Apple is able to improve the living standards of Chinese youth who work in Foxconn which is their third party factory in China. 

Importance Of Entrepreneurship To The Economy #6: It Helps Improve Infrastructure

It’s a fact that wherever entrepreneurs set up their businesses, the surrounding environment often receives a face lift e.g. when an entrepreneur sets up a steel manufacturing plant in a particular region, then chances are that the road network and other infrastructure e.g. lighting, will also receive a face lift.

Importance Of Entrepreneurship To The Economy #7: It Helps In Spreading The Spirit Of Entrepreneurship

As an importance of entrepreneurship to the economy, successful entrepreneurs are able to motivate others to also use their wits and set up businesses of their own e.g. the likes of Steve Jobs (RIP), Bill Gates, Carlos Slim, Mark Cuban and Barbara Corcoran have motivated others to also become entrepreneurs.

Importance Of Entrepreneurship To The Economy #8: It Helps To Save On Imports

By manufacturing products which consumers will want to purchase, entrepreneurs make it possible for a country to save on imports.

Importance Of Entrepreneurship To The Economy #9: It Contributes Towards Capital Formation

By setting up businesses, entrepreneurs are able to make profits which they then invest in other businesses e.g. Internet Companies like Google and Facebook were able to raise capital from Silicon Valley’s heavyweights who had made profits in their respective businesses.

Importance Of Entrepreneurship To The Economy #10: It Widens A Customers Choice Base For Products

Entrepreneurs who are into manufacturing make it possible for both you and I to have a wider category of products to choose from e.g. when you go to buy toothpaste, there are several brands that you can choose from.

Importance Of Entrepreneurship To The Economy #11: It Helps To Reduce Rural-Urban Migration

Many people who live in the rural areas usually migrate to urban areas in search of greener pastures. Entrepreneurs who set up businesses in these rural areas make it possible for the residents to find a source of income without having to migrate to the urban areas. This in the end helps in reducing rural-urban migration.

Importance Of Entrepreneurship To The Economy #12: It Helps To Develop Technology

We’re living in a digital age and many entrepreneurs are now more than ever integrating technology into their businesses and this has led to an increase in technological innovation so as to cope with the demand.

My Last Word On The Importance Of Entrepreneurship To The Economy

Every entrepreneur plays an important role in the development of their country’s economy and the above 12 facts on the importance of entrepreneurship to the economy are just a few instances of why they are important.

I’d therefore encourage you to embrace the spirit of entrepreneurship to improve not only the quality of your life, but also those around you. 

“The cover-your-butt mentality of the workplace will get you only so far. The follow-your-gut mentality of the entrepreneur has the potential to take you anywhere you want to go or run you right out of business but it’s a whole lot more fun, don’t you think?”-Bill Rancic

Feel free to share what you also think is the importance of entrepreneurship to the economy; I’d certainly love to hear from you!