5. What are the contributions of entrepreneurship to the economy?
5. What are the contributions of entrepreneurship to the economy?
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1. when a business owner hires people to work, he spurs the economy by creating job, providing salaries. These salaries will be spent by his employees on goods and services they need, and thereby, money circulates back to the economy.
2. when the business owner buys supplies for his operation, his suppliers will make money, paying for his (supplier’s) employees, thereby letting these employees able to spend /buy stuff and services , thereby putting the money back in circulation.
Entrepreneurship is the balance to big business.
In this way, I mean that most small businesses start off with less capital required to “make ends meet”.
Let’s take a big construction company compared to a smaller one. The bigger one is geared really to take on big jobs. It has a difficult time going after smaller jobs due to overall salaries/ benefits it has to pay its employees. A big company has a kind of bureaucratic chain in which the jobs it goes after have to be able to support. Some small companies will have an owner that is the only one in upper management.
So, in conclusion, big companies do some heavy lifting, but smaller companies can do smaller jobs more efficiently. The niches in which entrepreneurs fill can not be filled unless by small business.