Download The impact of enterprise on a country`s economy

Impact of enterprise on a country’s economy
Most governments around the world are encouraging citizens to become entrepreneurs. Why is that?
What benefits can the economy derive from business enterprise?
Advantages of Business Enterprises:
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Employment creation: when opening a new business, an entrepreneur is not only employing
himself but is creating jobs for others in society. The creation of these additional jobs can assist
society with a reduced level of unemployment; in addition, if these businesses succeed they may
expand and create more jobs.
Economic growth: any increase in the output of goods and services will increase the Gross
Domestic product of the country, so if new businesses surface, this will increase the level of
output and increase the GDP. This term is expressed as Economic growth. As a result of
economic growth the population can enjoy a higher standard of living and increased
consumption of goods and services. New businesses also assist the government with increased
taxes and revenues which in some economies can be beneficial.
Firms’ survival and growth: Not all businesses will survive for more than 1 -2 years, but some will
and expand their business. These businesses that do succeed however create more employment
opportunities and promote economic growth. They also take the place of other businesses that
are forced to close because of technology and the inability to adapt to consumer taste. E.g.
Trinidad and Tobago economy was once booming from the Sugar industry, however it slowly
declined and this economy was balanced out by the tourism industry, which provided many
avenues for small business. (You can link levels of economic activity moving from primary sector
to tertiary sector also noting that we were once underdeveloped and moving onto becoming a
developed nation.)
Innovation and technological change: new businesses tend to be innovative and creativity adds
to the dynamism to an economy. This creativity and innovation acts as a catalyst for other
businesses to become creative and consequently fostering a healthy atmosphere of
competition. Most emerging businesses are associated with technology and how this
advancement can help other business with innovation such as web design and much more.
These technological advancements have created an increase in competition as many businesses
will be technologically savvy and will create competition among one another.
Exports: All businesses no matter how small, they all have aims and objectives, some may decide
they would like remain small and stay within their country, however, there are others that have
a different perspective and want to venture outside of the local and regional market and begin
exporting in international markets. This adds value to the nation’s exports and improves its
international competiveness.
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Personal Development: some individuals start their business, not only to reap profits, but some
see it as way of self actualization. Maslow hierarchy of needs clearly outlines the different stages
all individuals go through. The last stage according to Maslow’s theory is self actualization and
some business owners tend to fulfill this and attaining a sense of fulfillment by utilizing their
skills. Others in society see this act and they may decide to follow and the economy can then
reap the rewards.
Increased social cohesions: unemployment is rated as one of the leading causes for social
problems in any society. The creation of jobs in society allows individuals to work and focus less
on criminal activity. Consequently, governments are implementing programs to assist those who
may not have the capital to begin their own business. This injection of capital creates more job
opportunities as well as decreases criminal activity and fostering an atmosphere of social
cohesiveness.