Entrepreneurship benefits economy more than just generating jobs
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.
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