Playing an instrumental role in the economy and society, entrepreneurs are critical cogs in the areas of technological innovation and the creation of new jobs. They serve as a catalyst to economic growth through their intensity, ingenuity and inspiration, triggering the production and sale of new products and services.
Throughout the world, economic success has been experienced by nations who encourage and reward the entrepreneurial instinct. When successful, their innovations serve to seriously improve our standard of living. An entrepreneur is an individual responsible for identifying a business opportunity and taking it from idea to implementation.
Creative, risk-taking, self-starters, entrepreneurs take the creative concept and launch this idea into a business operation. The entrepreneur’s long list of tasks include acquiring funding sources, managing the business, running the daily operations and marketing the business' products and services. A successful entrepreneur is one who turns his innovative thoughts into a business through the combination of meticulous planning, market research and a progressive vision. In a time where unemployment is a major concern in our society, entrepreneurs have played a considerable role in generating new jobs. A study performed by the Ewing Marion Kauffman Foundation in 2013 found that companies less than a year old with fewer than five employees have been responsible for the creation of about 1 million jobs per year for the past three decades. The study also revealed that companies with five to nine employees add another half a million each year. Additionally, it was stated in the National Employment Report that businesses with fewer than fifty employees created forty-five percent of all jobs.
In 2011, President Barack Obama designated November as National Entrepreneurship Month, providing further evidence of the importance of entrepreneurs in the economy. Then, in 2012, the White House launched Startup America to celebrate and accelerate the growth of entrepreneurship, pledging $2 billion over the course of five years to support entrepreneurship in underserved communities and young companies. True pathfinders, entrepreneurs can be tremendously influential in the evolution of communities in numerous ways. The small businesses that they create contribute to local economies by bringing growth and innovation to the community in which the business is established. They can also have a positive effect on a community through investment in local projects and contributions to local charities. Small businesses established by entrepreneurs help to stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations.
People who work for smaller companies are often given more creative freedom and are encouraged to share their ideas more frequently. Therefore these companies tend to attract talented individuals who produce new products or come up with new solutions for existing ideas. Another advantage created by the development of an entrepreneurial venture is that larger businesses often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the fulfillment of various business functions through outsourcing. This also adds to the development of the area by keeping the cash flow local. Several states and local communities have instituted vigorous strategies for the purpose of developing and fostering entrepreneurs due to the economic and social impact of entrepreneurship. Along with creating new employment, they play an influential part in the development of related businesses and/or sectors in support of the new venture, which adds to further economic development. Being that they are often quite customer centric, many small businesses have the capability to respond and adjust promptly to changing economic climates. For one thing, many local customers will remain loyal to their favorite small businesses during an economic crisis. With this loyalty, the businesses can stay intact, therefore strengthening the local economy.
Entrepreneurs can also have a major impact on the national economy. Through their new and improved products, services and technologies, they facilitate the growth of new markets and the creation of new wealth. In addition, national income is improved in the form of higher tax revenue and higher government spending as a result of the increased employment and greater earnings from the new markets created. The government can then convert that revenue by investing more into struggling sectors and human capital. Constantly looking for new opportunities, entrepreneurs effectively help with increasing the gross national product as well as per capita income of the people in a country. They analyze and take advantage of opportunities, encourage productive resource mobilization of capital and skill, bring in new products and services and develop markets for growth of the economy.
The increase in gross national product and per capita income of the people in a country that they create through their innovation is a strong sign of economic growth. In addition to the fact that small businesses are major employers and job creators, they also pay a large amount of workers' paychecks in the United States. Figures released by the Small Business Administration demonstrate that small businesses pay forty-four percent of the country’s payroll annually to their employees. That significant portion of the economy triggers and stimulates the rest of the economy by providing funds for employees to spend on essentials and other items they desire.
This spending strengthens the economy as a whole. Small businesses also play an integral role in the exporting of goods to other countries, further solidifying the U.S. economy. It is estimated that ninety-seven percent of exporters are small businesses, accounting for twenty-six percent of the export value in trade. Without that significant amount of product distribution, the economy would take a major hit. The impact that entrepreneurs have on society goes way beyond their own individual accomplishments. Successful entrepreneurs serve as an inspiration to countless others, encouraging them to reach for their dreams and come up with ingenious ideas of their own. There is no better example of the American Dream than an individual who starts up their own company, rising up from dire straits to financial prosperity.