There has been a rise in start-up culture in various Asian economies owing to the upcoming young population, potential and globalization. Though this means that a large portion of the economy is taking a risk, entrepreneurs are needed for the development of a healthy economy. For this reason many of these Asian economies are encouraging entrepreneurs by relaxing governmental regulations, tax benefits and so on. This article brings out why entrepreneurs are important for the economy.
The first reason as to why entrepreneurs are important for the economy is the number of jobs their ventures create. New businesses and companies mean more jobs; this benefits the economy by reducing the rate of unemployment. More of the youth are absorbed into the workforce and this reduces the burden on the government and the economy.
Products and Services:
The second reason as to why entrepreneurs are important for the economy is the innovative products and services that result out of entrepreneurship. These new products and services, raises the amount that is spent by the nation and even exports. This distributes the wealth that is accommodated with certain people.
The third reason as to why entrepreneurs are important for the economy is the increase in exports. The more a country exports or sells its good and services outside of its territory, it tips the balance of trade in its favor. The products that are resultant out of entrepreneurship help the economy to improve its balance of payments. It also helps the value of currency of the economy to grow positively. Entrepreneurs are helpful in this aspect.
The fourth reason as to why entrepreneurs are important for the economy is that they cause people to invest. People save on a general basis and store it away for future purposes. Instead of keeping such resources idle, entrepreneurs help to put them into use and generate more money. Instead of keeping your savings idle, investments make sure that they are put to use and create much more money than idle money at the bank could create. This is good for the economy, because it is the effective efficient utilization of all resources of the economy.
The last reason as to why entrepreneurs are important for the economy is the revenue that they generate. The revenue these businesses generate is subject to be taxed by the government. The more taxes the government collects, the more is spent on the betterment of the state. Hence entrepreneurs help the government to collect more taxes.
Entrepreneurs are very much required to keep the economy of a state alive and in its best form. It leads to building new industries, products and services. It results in bringing out the best that is possible with the available resources.