You can never underestimate the importance of entrepreneurship in the success of society. After all, it’s a process that generates wealth and provides value to its stakeholders. That’s why it’s imperative to continuously support its existence.
To expound more, here are the four most compelling reasons why entrepreneurship is essential:
1. Generates New Businesses
Perhaps the most apparent effect of entrepreneurship is creating a new business. But more than just setting up your own shop is the potential to stimulate other business sectors as well.
Take the Indian IT industry, for example. Their entrepreneurial goals of setting up programmers’ hubs in India have led to numerous different sectors. Their investments inspired the creation of other businesses as well. From training institutes and hardware providers, to call centers and real estate, the IT industry certainly spurred the growth of firms as they entered the market.
As a consequence, numerous jobs were also created. Therefore, we can see the importance of entrepreneurship to the continuous business and job creation cycle, which ultimately benefits everyone in society.
2. Encourages Creativity and Innovation
A large bulk of an entrepreneur’s success is their ability to set themselves apart from the rest of the competition.
Entrepreneurs seek to challenge and rewrite existing principles, whether to develop a whole new logistics system, make a more efficient customer service, or create a revolutionary video-on-demand platform.
Entrepreneurs don’t conform to what’s currently working and always ask how things could be better.
For example, Netflix developed technology and strategy for streaming videos such as movies and series. They were passed up by the streaming giant at the time, Blockbuster, which instead developed a completely different video-on-demand platform. However, we can see that Netflix today is thriving as one of the biggest streaming platforms in the world.
In fact, their streaming and business model is now used by large multinational companies like Disney and Amazon for their own streaming services. On the other hand, the Blockbuster franchise entity dissolved as they failed to innovate.
3. Promotes Social Progress
More than just creating jobs and improving business practices, entrepreneurship also sparks social change and progress. Essentially, entrepreneurship provides a boost in numerous sectors that play a massive role in your quality of life.
For instance, innovation in agriculture, healthcare, and education would have not been possible without the entrepreneurial spirit of people. Furthermore, you can also see much social entrepreneurship in society that aims to solve social problems while still meeting its revenue goals.
Because entrepreneurs are creative in their approach to various social problems like hunger and poverty, society could explore more solutions to tackle these issues. In fact, entrepreneurs can even find ways to make a technology or amenity more accessible to lesser-developed nations. You can see this in technologies like the smartphone, which is also widely used in third-world economies, thanks to the lower cost of production brought about by innovations in manufacturing.
4. Improves Productivity and Economic Growth
The economy is a crucial beneficiary of entrepreneurs. As they continue to innovate, generate new businesses, and improve people’s lives, this translates to a population with more wealth to spare.
Higher earnings also mean higher taxes for the coffers of a nation. Consequently, they’ll have more resources to invest in infrastructure, human capital, and other sectors of society.
The Bottom Line
The importance of entrepreneurship is evident. Without it, there’d be no advancements in technology and society. Because of entrepreneurs, we’ve developed better strategies, discovered new ideas, and improved lives across the board.
Many people don’t take risks because of the fear of failure. However, entrepreneurs have shown us that the willingness to take risks and unleash one’s creativity can spur everyone forward. Entrepreneurship made it possible to generate more wealth. But, most importantly, it empowered people to solve complex societal issues. And we’ll see entrepreneurship play this role in the many years to come.