Entrepreneurship: The Key to Economic Success
“More than any other member of our society, entrepreneurs are unique because they’re capable of bringing together the money, raw materials, manufacturing facilities, skilled labor and land or buildings required to produce a product or service” (Tracy)1. They take risks in order to fill the void between what is available and what consumers want or need.
Entrepreneurs create prosperity and growth within the economy “…because it is the entrepreneurial energy, creativity and motivation that trigger the production and sale of new products and services” (Tracy)1. These businesspeople help build our economy by creating jobs, increasing productivity and partnering with other firms to help reach success. Entrepreneurship is so crucial to society because “it’s the entrepreneurs who serve as the spark plug in the economy’s engine, activating and stimulating all economic activity…” (Tracy)1. Entrepreneurial firms highly impact the economy by creating jobs, which is essential in fueling our economy. When an entrepreneur begins to expand their idea, they are in need of employees who can help them attain their goal of creating a successful business.
This helps to keep unemployment stable as there are always new jobs being created in place of those that are lost. Entrepreneurship is a solution to high unemployment because those who were laid off or received pay cuts turn to creating a business as a source of income. In turn, these businesspeople hire more employees for their new company. This causes the unemployment rate to decrease and more money to circulate, which aids in bringing the economy back to a more stable position. However, in order for entrepreneurial firms to grow and create more jobs, they need innovation to create new ideas.
Innovation is crucial to becoming a successful entrepreneur because an idea not only has to be new, but it also has to be useful. It is critical that one does not start a business by differentiating it from one that already exists. Instead, they need to take a risk and create an entirely original business on their own. If a company has a new creative disturbance, they are more likely to receive funding because “Investors are looking for unique offerings and business models that are likely to score big in the near future,” (Hassan)2. On top of being new and creative, the business also has to be useful. In order to be successful, there has to be a market for the product or service that is being produced. However, this market needs to have a low amount of suppliers.
For example, you should not open a coffee shop on the corner of a street that already has four other coffee shops just because you know there are many consumers in this market. Instead, you should find a market with many consumers and hardly any suppliers, such as Apple did with the IPhone. These new and useful companies can create new products in markets that have none, which will open up an entire new sector of business and stimulate the economy. By having innovative ideas that are new and useful, these businesspeople are enhancing our lives.
Entrepreneurs have created products and services that changed our lives by making tasks easier, increasing our productivity and simply giving us entertainment. For example, the internet has allowed society to stay up-to-date through social networks and informative websites. We are able to go online to discover what is happening across the world instead of waiting to read about it days later in the newspaper. The internet also led to the creation of social networks, instant messaging and E-mail, which allow us to stay in contact with people, no matter their location.
These services are also a form of entertainment that has become extremely popular. Henry Ford created the assembly line, which significantly increased productivity. “Because of the more efficient production, Ford was able to cut hundreds of dollars off the price of his car” (Henry Ford)3. The assembly line concept quickly spread throughout many businesses due to its increase in efficiency. As entrepreneurs increase productivity, companies are able to lower their prices and make these new inventions more affordable for consumers.
Entrepreneurs, like Henry Ford, have created products that are used within larger firms. For example, Apple does not actually make the IPhone. “The components come from a variety of suppliers and the assembly is done by Foxconn, a Taiwanese firm, at its plant in Shenzhen, China” (P.K.)4. Some of these suppliers produce their own products as well, such as Samsung. However, other suppliers only focus on producing parts that are going to be used in other products from larger firms. “The evidence shows that many entrepreneurial firms have built their entire business models around producing products and services that help larger firms be more efficient or effective” (Barringer 22)5.
This relationship between entrepreneurial firms and larger companies is extremely helpful for both parties. The smaller businesses gain access to resources and insight on how a larger firm is run while the larger firm increases productivity and proficiency. Larger firms also rely on these entrepreneurial firms in order to keep up with the change in consumers’ needs and wants. Both the larger companies and the smaller firms rely on each other, which forces them to help each other succeed.
While entrepreneurship has many benefits to society, there are also some negatives that are associated. These innovations have created issues that raise concern in society. “For example, bar-code scanner technology and the Internet have made it easier for companies to track the purchasing behavior of their customers” (Barringer 22)5. This new technology was created to help companies collect data that would be used to help make them more successful. However, it has caused customers to worry about privacy, which questions whether or not the new product is beneficial. “Similarly, bioengineering has made it easier to extend the shelf life of many food products…” (Barringer 22)6. This raises concern that there are negative health effects and questions whether or not this product is favorable. Although there are negative aspects, entrepreneurship is still very valuable to society.
Entrepreneurship is the key to a successful economy. Whether they are creating products for larger firms or inventing ways to make life easier, these firms are creating jobs and increasing productivity, which stimulates the economy. Entrepreneurs are able to fill the gap between what consumers want and need and the products that are available to them. They take innovative ideas and find the resources to expand them. With the creation of products, such as the internet and the assembly line, our lives have been greatly enhanced. Entrepreneurs play a critical role in fueling our economy and without them our world would never grow and prosper like it has thus