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7 Ways Entrepreneurs Drive Economic Development: 1. Investing in Products and Services People Need

Entrepreneurship drives economic development in several ways: 1) Entrepreneurs create businesses that invest in products and services people need, providing employment opportunities and strengthening market competition. 2) New businesses trade goods and services regionally, increasing revenue and promoting investment in infrastructure. 3) Innovation leads to new technologies that promote efficiency and prosperity through addressing challenges like climate change and improving productivity.

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94 views3 pages

7 Ways Entrepreneurs Drive Economic Development: 1. Investing in Products and Services People Need

Entrepreneurship drives economic development in several ways: 1) Entrepreneurs create businesses that invest in products and services people need, providing employment opportunities and strengthening market competition. 2) New businesses trade goods and services regionally, increasing revenue and promoting investment in infrastructure. 3) Innovation leads to new technologies that promote efficiency and prosperity through addressing challenges like climate change and improving productivity.

Uploaded by

teha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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7 Ways Entrepreneurs Drive Economic Development

Entrepreneurs create businesses, businesses create jobs and people with jobs make
good ​customers​.

There’s been a lot of talk lately about the future of work. Much of the time, these
conversations ​are fueled​ by the anxiety many of us share as we try to understand
the impact new technologies will have on our industries. We tend to reduce these
discussions to simplified arguments: how smart machines will do extraordinary
things to improve our lives, or how an ​innovation​ will make human labor ​obsolete​.
It’s not that these concerns aren’t valid, but they ​oversimplify​ a more complex
phenomenon.

Why do entrepreneurship and innovation fuel economic growth? On the surface, the
answer seems intuitive: entrepreneurs create businesses and new businesses create
jobs, strengthen ​market competition​ and increase ​productivity​. Entrepreneurism is
seen as ​a route​ to ​upward mobility​ -- a way for average people to build wealth. Let’s
take a closer look.

1. Investing in products and services people need.


What motivates a person to start a new business? According to traditional models,
entrepreneurs create new businesses in response to needs and demands in the
market. Economists refer to these business-starters as ​“opportunity” entrepreneurs
in order to distinguish these individuals from those who start businesses for lack of
better work opportunities. So-called “opportunity” entrepreneurs, who ​launch​ new
enterprises in response to market needs, are key players when it comes to fostering
economic growth in a region. They enable access to goods and services that
populations require in order to be productive. This is not to ignore ​“necessity”
entrepreneurs​ that launch enterprises because they have no other options. Both can
and do contribute to economic growth.

2. Providing employment opportunities.


New businesses need ​to hire​ employees. They create jobs and these economic
opportunities uplift and support communities through increasing the ​quality of life
and ​overall​ ​standard of living​.

3. Commerce and regional economic integration.


Technology has made it possible for small, entrepreneur-led businesses to expand
into regional and global ​markets​. When new businesses export goods and services
to nearby regions, these enterprises contribute directly to a region’s productivity
and ​earnings​. This increase in ​revenue​ strengthens an economy and promotes the
overall welfare of a population. Economies that trade with one another are almost
always better off. Engaging in regional and international trade promotes ​investment
in regional transportation and infrastructure, which also strengthens economies.
Foreign trade, according to some estimates, is responsible for over 90 percent of our
economic growth.

4. New technologies promote ​efficiency​.


The ability to turn ideas into new products and services that people need is
necessary ​prosperity​ for any country. Economic growth is driven by new
technologies and their creative uses. Periods of rapid innovation historically have
been accompanied by periods of strong economic growth. The driving force of
innovation is the greatest natural resource of all: the human mind. Creating
innovative products and solutions requires an educated population and an
environment where collaborative work can take place. In addition to being good for
business, education increases workforce creativity and quality of life.

5. Addressing environmental challenges.


Innovation is ​crucial​ when it comes to addressing the enormous environmental
challenges we face today: combating climate change, lowering global ​greenhouse
gas emissions​, and preserving ​biodiversity​ in the environment. Without power for
extended periods of time, ​commerce comes to a halt​. Without water, we cannot live.
Reliable access to these innovations (such as irrigation technology, electricity, and
urban infrastructure) increases productivity and improves economic development.

6. Innovation impacts ​socio-economic​ objectives.


Innovative business practices create efficiency. Innovations in agriculture and
healthcare are especially relevant for addressing socioeconomic challenges.
Hopefully, new ideas and innovations in the future will address these problems,
resulting in further improvements.

7. Innovation happens where there is competition.


There is a positive connection between innovation, entrepreneurship, and economic
development. New and growing businesses represent the ​principal sources​ of job
creation and innovative activity in an economy, two factors that generally result in
the rising standards of living for all.

However, it’s important to understand that entrepreneurship and innovation are


dependent on access and participation. For entrepreneurs to bring new ideas to life,
they need access to education and a ​level-playing field​ on which to compete. ​In this
vein​, the role of government leaders and public policy is to create conditions that
allow more entrepreneurs to start businesses by implementing policies which
nurture​ that environment so those businesses can grow. Economic growth suffers
when entrepreneurial activity is ​unevenly​ spread socio-economically,
demographically​, and ​geographically​. Under the right conditions, entrepreneurs
have an incredible power: they help regional areas ​prosper​ economically, and they
also serve society as they help engineer innovative solutions to problems and
challenges.

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