Entrepreneurship benefits economy more than just generating jobs

by Ashvini Kumar Saxena on December 15, 2011 · 16 comments

in Entrepreneurship

In these times of recession there have been loud cries for creating more jobs. I was recently reading a book by Thomas Friedman. In his latest book “That used to be US”, Thomas Friedman has put a lot of emphasis on need to support entrepreneurship. Entrepreneurs not only help economy by developing products but also create a number of jobs that require skills that were probably not needed before.

Road to prosperity with entrepreneurship

Hundreds of companies across the world are creating products that catch user fancy and are leading to increased demand which means businesses invest more in technology and thus look for people or train them for new skill sets. In the end it brings more jobs and more prosperity to the world.

It is not really the “job” of government to provide jobs to their people. Government needs to act as a facilitator to help the entrepreneurs who bring in the tax revenues and jobs to the public. This may be the only way forward as big businesses are already saturated and find it difficult to create jobs in recession while governments probably do not have enough money to create more jobs.

Entrepreneurs not only create local jobs but also bring prosperity around the world by selling goods and services all over the world, hiring the best talent. While the big business are keen to cut costs (of which cutting jobs is a major part) entrepreneurs are keen to hire people at much higher salaries compared to that existing in the current market.

Let me explain to you how entrepreneurs really help economy.

Entrepreneurs invent , thus bringing in the products that  did not exist before.

Thomas Alva Edison created light bulb with a lot of hardship but he changed the world with that. We started looking at artificial light in different way. It magnified the productivity while paving the way for thousand of other products to be launched.

Facebook was exploited an almost unknown concept of social media. Google created ad systems which changed the way, internet commerce is done. Apple created revolutionary products and marketed them so well that they became a huge category by themselves.  Amazon made it possible for anyone to publish and become an author. Infosys brought one of the best project management practices to the IT services.

If you just search on internet , you will find there are a thousands of companies , really small in size are creating product trying to capture the demands that have been created because of enhancement of technology.

Entrepreneurs optimize: They know the value of resources and thus need to learn to optimize them for best result

Entrepreneurs know that they have limited resources. It means that have to optimize whatever they have got. Thus often they resort to unique ways to run businesses. Some for example run their business from their house just to avoid the cost of renting a place. Some learn new skills to do things themselves. They reinvest their revenues rather than splurging it for personal needs. They run tight marketing campaigns.

Thus the entrepreneurs know the value of resource optimization and are usually less wasteful than their large counterparts

Entrepreneurs find hidden demand and then create solid plans to exploit them

While most of the people can see a hidden demand but the entrepreneur creates a solid plan to harness that demand. Bigger companies ignore the nascent demand because it may not have the revenue potential at present . Entrepreneur will seize this opportunity and work through it patiently for years to become successful.

Entrepreneurs hire people with skills

An entrepreneurs may need certain kind of skills to develop her products. She may need services of a qualified chemistry expert for example to develop new brand of cosmetics. These skills often come at a premium. People are willing to work for smaller enterprises because of the kind of flexibility that is available with them.

Entrepreneurs encourage specialization and often reward them with money or share in the company which may build up sizeable wealth in future.

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 What do you think about entrepreneurs generating wealth and jobs? I would love to hear your opinion

About The Author

{ 15 comments… read them below or add one }

ScannerMan December 21, 2011 at 1:52 am

Your article hits the nail on the head quite squarely.
Thank you.

I have written and said time and again that the US dropped the ball right after WWII. We needed to upgrade our educational system to emphasize entrepreneurship and business practices. We needed to teach economics from grade school, and especially needed to add cultural anthropology with at least one foreign language as requirements from grade school through. It was nobody’s “fault” that this did not happen. We had just gotten out of three horrendous wars, two contained in WWII and then Korea. The American people wanted to rest! During the 50s nothing along these lines was done. This helped the 60s be what it was. Babys born in the 40s were now coming of age. This was the time for the US to head for the top in business and entrepreneurial endeavors world wide. We had a good time. We rested.

The rest of the world did not have the luxury of rest. There was a civilization out there to rebuild. The war had not been fought on US soil but on everyone else’s. FDR was rebuilding the infrastructure when the war started. When it ended soldiers came home to a new country. The sleeping giant went back to sleep in his nice new bed. Industry went overseas while entrepreneurs at home were few. By the time the auto industry slumped, we were ill prepared to take up the slack at home.

Now entrepreneurship rules. It is THE way to go in a global society. And yes, it will help create new jobs both in the US and in the booming global environments.

It’s the dash for the cash.

Reply

Ashvini Kumar Saxena December 22, 2011 at 3:52 pm

Hey Scannerman,

Thank you for providing comprehensive account of history and what needs to be done now.
In my opinion entrepreneurship create jobs. Jobs themselves will never create jobs. The more entrepreneurs we have the better. India has so many entrepreneurs but rarely we see government supporting entrepreneurship except for a few here or there .

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Max M December 20, 2011 at 6:41 pm

Sometimes individual business is the only way for the country to survive, but not all authorities understand it as they believe that they can rule the coutnry out of business. I agree with everything written in the article and i strongly believe that business will rule the world, although it is doing it.

Reply

Solenn@48HourMasters December 19, 2011 at 8:52 pm

This trend has been going on for a long time and I think that finally, the ordinary people are going to bear the full impact of such tactics. I am sometimes really afraid for the future of the world.

You might check out the book from 1952, “The Space Merchants” by Frederick Pohl. This book describes a world that looks very much like the one we are currently building. Earth has been monetized, states have been incorporated into commercial zones, the government has forgone the fantasy of elected officials and allowed corporations to place their own candidates in the senate and the house. The President is a lackey of big corporations which run the world as they see fit! Reality is not far from this gloomy vision…

Solenn@48HourMasters’s latest article :Cd Mastering Cost

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Adam Paudyal December 20, 2011 at 3:02 am

The space merchants…now that sounds familiar.

Ash, The importance of entrepreneurship is just too immense for improving the country’s as well as the global economy. No doubt.

This is a motivational piece my friend. Reminds me of some of the main reasons why I am an aspiring entrepreneur. (O:

Adam Paudyal’s latest article :9 Business Blogging Mistakes To Avoid Like The Plague.

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Ashvini Kumar Saxena December 20, 2011 at 3:54 am

Hey bro,

I think that entrepreneurs all across the world are busy changing it for better. Its them who move economy forward without much help from governments. Truly remarkable indeed.
Glad to have you on board as an entrepreneur :)

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farouk December 19, 2011 at 5:43 pm

that’s true
people should encourage entrepreneurs because they support the economy
thanks for the post

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Aswani December 17, 2011 at 12:11 pm

hmm…what should I say..??

At times, I feel you should have been a motivational speaker or anything like management guru…:-) This is truly one of the best motivational articles on your site. I feel so motivated after reading this…wish I too was an entrepreneur. But anyways, it is never too late. Entrepreneurship is one of the things which has always fascinated me but still…I don’t know why…could be several factors. Anyways, entrepreneurship does look benefit in the long run if everything goes well. It can be benefiting to the economy as a whole. I am really proud being an Indian because I find our country being a rich reserve of entrepreneurs and the budding entrepreneurs. But I was quite surprised when I came across this writeup the other day – http://timesofindia.indiatimes.com/business/india-business/Indias-billionaires-frustrated-want-to-shift-base-overseas/articleshow/11114890.cms

What say ??

Aswani’s latest article :Setting goals for money blogging – Taking inspiration from top money bloggers

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Ashvini Kumar Saxena December 20, 2011 at 3:57 am

Hey Aswani,
An entrepreneur is one who is able to see hidden demand and create products and services around it. India has had a number of entrepreneurs both social and business. These days economic climate is not great for entrepreneurs . I hope we get back in groove asap :).

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Chrysta Bairre December 17, 2011 at 12:22 am

Great post, Ashvini and I couldn’t agree more!

I recently finished reading ‘The Leader’s Way’, co-written by the Dalai Lama and Laurens van den Muyzenberg, in which the importance of entrepreneurship was effectively demonstrated for improving domestic and global economies and creating jobs for people who would otherwise be out of work.

Employment with corporate companies is a valid and valuable option for many, but not for all, and as many Americans are discovering that corporate employment is not as stable as we once believed. Entrepreneurs drive discovery and innovation, and provide unique professional opportunities that can reach a greater number of unemployed people.

Governments could serve their population well through supporting plans that provide more opportunties for entrepreneurs to fund their ideas and build businesses.

Thank you for sharing this important perspective on the unemployment problem that exists across the world.

Chrysta

Chrysta Bairre’s latest article :A Sweet and Simple Guide to Personal Branding

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Ashvini Kumar Saxena December 20, 2011 at 4:09 am

Hey Chrysta,

Before India arrived at international scene because of “outsourcing”, we had really moderate growth of 2-3% per year( which was really low for a developing country). With time and integration of India with globe, things have started getting better. In those times, we did not have that many jobs. They were mostly in factories and employees in there were overworked and demotivated.
With very growth rates, jobs increased but then slowdown in USA has taught everyone across the world that they need to take matter in their own hands irrespective of the good or bad times.
Entrepreneurship is important because it helps us think and optimize our resources. I remembered reading about a woman athlete in Bosnia who worked hard on being a top athlete even though war raged in her country. She was determined to do something enterprising within the constraints she had. A true entrepreneur !
I think governments really need to think hard and encourage entrepreneurship because it is the only saviour of the world economy in uncertain times.

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Adrienne December 16, 2011 at 10:56 pm

I agree, great read Ashvini and oh how true.

As I was reading through your list of entrepreneurs who have created so many jobs for others I was also thinking of Google and Dropbox. Two more huge companies that were formed because of one person’s dreams. Then you have people like Mike Dillard and Ryan Deiss who now have plenty employees working for them as well. And to me, they are creating some much needed products and services.

I have no doubt that’s an excellent read. Might have to put that on my wish list. I’m getting three for Christmas so I have my reading scheduled for a few more months.

Thanks for this post.

~Adrienne

Adrienne’s latest article :5 Things You Can Learn From The Biggest Loser

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Ashvini Kumar Saxena December 20, 2011 at 4:14 am

Hey Adrienne,
Thanks for adding to the conversation. I checked out the names you have mentioned and both of them are excellent examples of entrepreneurship. I think all the companies in which we worked ever were started by enterprising individuals and they changed the world. All they had was vision and commitment.
I like Tom’s book because it has great international perspective . Even though the things that he talks about are mostly in USA, they are relevant to all the democracies as well.

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Bryce Christiansen December 16, 2011 at 12:09 am

I really liked the world is flat and Thomas Friedman is always ahead of the trends.

I’ll have to pick up this book for sure. If you have an affiliate link I’d be happy to support you for referencing this to me. I’ve got a bundle of books to read currently, but I’ll be sure to pick this one up after my reading slows down.

Bryce

Bryce Christiansen’s latest article :Tina Fey’s Rules For Improv…And the WorkPlace

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Ashvini Kumar Saxena December 16, 2011 at 12:23 am

Hi Bryce,

Thomas has great perspective. I think he has travelled a lot and learned a lot of things about many countries. It is a great book. Though it is written primarily for USA but I find many similarities for India as well because we face quite a number problems mentioned in there.

I have placed the ref link in the post above. Thanks for your offer. I really appreciate . Have a great day

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