Entrepreneurs as The Backbone of the Economy: Understanding Creation of Jobs And Economic Growth
The fledgling entrepreneurs, who come up with an idea and then make it happen with the help of investment and other necessary helps, are better known as the backbone of the economy. For an economy to be successful, it is very important that it has policies that advocate for the growth of small businesses. The role, that an entrepreneur plays while nurturing his or her business, is appreciated and encouraged, at least in the United States as the policy makers believe that small businesses are truly the structure that holds the economy in a firm manner.
Even though all of it seem very appealing , one must be wondering that how a small business that just started doing business could even possibly contribute to the economic growth. Since the foundation layer of an economy in a capitalist country is based on innovation, competition and growth, The point is that small businesses have the power to make a change happen since successful entrepreneurs are more likely to think in a rather unconventional manner and tend to foresee the benefits that an industry could possibly have. Here are some points on how the new businesses actually change the scenario prevailing in the market:
When The Existing Market Faces The Challenge
With the emergence of new businesses in the market, the existing market is necessarily in front of facing a shock wave. The prime reason is that new businesses often come up with a different yet impressive expression of their brand. Even though some of them are just the replica of some successful business, they instill unique value proposition in their bid to impress the customers.
A niche, when presented in completely different manner than the rest of the market, certainly evokes some attachment in the mind of the buyers. With all that happening, old companies that have already been out there either lose market share by losing a huge number of clients or make necessary changes to sustain in the new environment. Competition, as practiced in a healthy manner, is considered to be fruitful for a capitalist economy.
Market Disruption and Its Consequences
With the advent of the new technology, hundreds of traditional business go out of the market every single day. For example, traditional manufacturing jobs were disrupted when robotics came into the scene. But, one needs to get the bigger picture here.
While one business gets disrupted by another that all the necessary means, other fields actually open up in order to respond to alerts, program systems, so on and so forth. Let us stop for a minute and have a look at the Netflix. As many would agree, Netflix has revolutionized the way we used to see the video rental industry.
No one literally goes to the video store as they can easily stream movies through a subscription service. Even though this has caused a net decrease in positions, the newly opened warehouses for the purposes of processing the DVDS will need the job force to shift from their previous position and attend to the new one emerging.
Flexibility Beyond Imagination
With a less number of employees and less infrastructure than larger companies, small businesses are way more flexible than the big corporations. This story goes in two directions basically. One side of the coin is that the small businesses may not be able to attract the best talent since they are not able to offer the same compensation package that a large corporation will offer.
On the contrary, they are more likely to adjust themselves to the changing market conditions whereas it would take big giants a good amount of time to implement the changes. At the same time, big business have to go through lengthy procedures to get something approved, causing them ultimately a lot of disadvantage compared to smaller companies.
Cutting Edge Competition Compels Companies To Streamline
When cutting edge competition is there in the market, bigger business make an attempt to survive at the beginning. Upon completion of successful survival, they try to become more streamlined in a bid to maintain and practice their power. This entire process is like cycle.
While the big corporate make an attempt to streamline in order to respond to the small businesses, they end up compelling other big business to move in an entire different trajectory as well. With that happening, small companies are actually able to dominate the market with their newly innovated products and services. But as the small business start to grow, they begin to confront the some additional challenges from other startup companies.
At that point, they have to streamline as well and this cycle pursues to go on and on for ever. With a small business entering into the market, the jobs are created in S wave, as the experts say. While at the beginning, a large number of people are hired, the mid-stage observes a period of flat growth with the competition right-sizing or losing, And, then, the job are created to a larger extent again as the small businesses start to grow.
If you are planning to be an entrepreneur, it is very important that you know all these strategies since it is going to help you to make your business bigger and more successful. It is quite evident that you will be more comfortable with your business if you knew that your entrepreneurship is making a good deed in terms of adding to the growth of the economy. Adopting a manner that is different than the big shots in the market, when you present your product or service, you need to be aware of the fact that sooner or later your USP is going to make a lot of changes in the job scenario.
More you are willing to learn about it, more you can push the bigger companies and become larger than you have ever imagined yourself to be. As an entrepreneur, you’re literally the backbone of the economy as your success can force others to move in an entire different direction. So,you better put your heart into what you are doing.