Why are entrepreneurs important for the economy?

. 2 min read

By Arjun Sondhi Entrepreneurs are seen as the disruptors to industries and the key to society moving forward. If successful, they can change the way in which we go about our day-to-day lives and also fuel the growth of the economy via the creation of jobs and improvement to existing systems. So how do entrepreneurs benefit the economy? 1) More efficient businesses Entrepreneurs are often wired to disrupt existing industries that have become rigid and out-dated. These trailblazers can cause a domino effect in which other businesses within the same sector alter their business models to become more efficient and effective. The disruption to industries caused by the entrepreneur’s, forces other businesses to change for the better. New and improved products, services and business model’s from entrepreneurs enable the development of both new markets and wealth. 2) Generation of new wealth Novel entrepreneurial ventures generate new wealth for the economy as more jobs are created and the increased earnings contribute to increased national income. In order for new ventures to accelerate and succeed, it is important that they build partnerships with local vendors. These networks of local businesses produce a chain reaction of business deals- which in turn drives revenue of other businesses in the community. 3) Improvements to society Entrepreneurs are innovative by nature and often break away from tradition, therefore reducing the need for old & broken systems. Innovation allows for industries to become more efficient and conservative, with regards to resources. For instance, in the U.S, billions of dollars are wasted due to inefficiencies in the healthcare system. Successful entrepreneurs focus on building product/services that address these inefficiencies, therefore improving the quality of life to members of the society. By Arjun Sondhi - Director of Digital @ BMC Global Services