5 Reasons Why Entrepreneurship Is Important

November is the US’ National Entrepreneurship Month and in 2022 the president celebrated “the doers, dreamers, and job creators whose vision and grit fuel our economy and capture the essence of America.” That’s quite an accomplishment! 

So how do entrepreneurs do it? Why is their work so important and why does the government distribute billions of dollars annually in loans and aid to entrepreneurs?

Entrepreneurs play a key role in the American economy and society, so the US distributes loans and aid to help their businesses grow and return the investment many times over.

Entrepreneurship is important for millions of Americans and this guide details the top five reasons entrepreneurs and their ventures are so crucial to local and national prosperity.

1. Provide Needed Goods and Services

First and foremost, entrepreneurs provide needed goods and services. After all, if nobody buys their products or services, their business isn’t going to last very long! Thus, the vast majority of entrepreneurs currently running a business have found a willing market. 

And as their business grows, they’re able to expand and enhance the lives of more and more people. Most entrepreneurs do thorough research to ensure the product they sell matches what consumers are looking for at a superior price or quality than what’s already available. 

In some cases the product is ahead of its time, as smaller businesses are more nimble and better able to quickly respond to shifting markets and consumer demands. 

An example of this is all the home-based mask-making businesses that popped up in the early days of the pandemic, as manufacturers struggled to meet the tsunami of demand. 

2. Create Jobs

Every business needs people to run it, which means that every successful entrepreneur creates jobs. In 2021 alone, US startups created almost 3 million new jobs. Setting aside the entrepreneur, businesses employ countless clerks, stockers, accountants, administrators, managers, drivers, and more, enabling them to use their skills to make a living.

Entrepreneurship is also an option for people unable to find suitable jobs, which is known as necessity-driven entrepreneurship. With many entry-level jobs now requiring college degrees, many Americans are instead choosing to bet on their own entrepreneurial skills. More than 4 out of 10 US entrepreneurs were said to be necessity-driven in 2019.

Whether it’s just the entrepreneur or the entrepreneur and dozens of employees, starting a successful business is sure to improve someone’s livelihood.

3. Innovate New Ideas

Other than necessity-driven, the other main category of entrepreneurship is innovation-driven, or when the entrepreneur creates something new in the marketplace. 

On top of brand-new products or services, innovations can also take the form of revolutionary business practices, such as Eli Whitney’s cotton gin and the concept of interchangeable parts.

Though big companies might invest more into R&D or consumer research, they sometimes fail to grasp what consumers want. If a person creates a new product or service that improves lives, what better way to prove its efficacy and promote it than by starting a business?

4. Make A Difference

Entrepreneurs often make a difference in their own lives, and often many others’. During the pandemic, many Americans realized their dissatisfaction with their current jobs and decided to quit and start their own business. 

As a result, a record-setting 5.4 million new businesses were launched in 2021. In a survey by digital.com, new entrepreneurs gave “make money” and “pursue a passion” as the top two reasons for starting their own business. It’s clear that many entrepreneurs started their businesses hoping it would make them money and improve their well-being. 

Entrepreneurs can also make a difference by becoming social entrepreneurs whose businesses are focused on addressing a social issue, such as providing low-income housing or medical care for orphans. 

Social entrepreneurs entwine commerce and compassion, ensuring that each bit of revenue does some good. 

5. Drive the Economy

When they create and sell products and services, entrepreneurs keep money flowing from suppliers to manufacturers, and from customers to banks, helping drive economic growth. 

Just as blood needs to flow to even the smallest capillaries, a healthy economy needs money to flow to every tier of society across the nation. Entrepreneurs help do this by supporting local suppliers and buyers, keeping money moving organically.

Entrepreneurs also help by creating new jobs, providing people with disposable income and enabling them to support other businesses and bolster the nation’s consumer spending.

Finally, if the entrepreneur creates a brilliant new innovation, they might revolutionize their industry or start a new one, spawning millions of jobs and new businesses that follow in their footsteps. Think of how many lives have been changed by the launch of Airbnb, for instance. 

Conclusion

Entrepreneurship embodies the American Dream – entrepreneurs take bold risks and drive the economy while pursuing their passions. By supporting their endeavors, America creates new jobs, new ideas, and new opportunities. 

Keep this in mind the next time you visit the mall or stroll down Main Street. And if you think you’ve got a great business idea, now’s a fantastic time to become an entrepreneur and encourage further American prosperity!