Q:

Why are entrepreneurs important to our economy?

A:

Quick Answer

Entrepreneurs are important to the economy because they literally generate wealth. Existing companies can only redistribute the wealth and resources the company already has. By starting a new company, an entrepreneur introduces new sources of wealth into the economy, first by creating new products or services for purchase and second by providing incomes for people who need jobs.

Continue Reading
Why are entrepreneurs important to our economy?
Credit: JOSEPH EID / Staff AFP Getty Images

Full Answer

The economy runs on wealth, which is measured in both money and in goods and services available for consumption. At any given time, there is a set amount of wealth available for distribution. This is why some people have more money than others and why certain types of goods and services are not available to everyone.

When an entrepreneur creates a company, that entrepreneur literally makes new wealth. The entrepreneur creates a product, a service or an idea that did not exist before, and by doing so adds to the goods and services available for consumption. The entrepreneur also provides opportunities for other people to earn money and creates jobs to redistribute and share the wealth the entrepreneur has created.

Without a constant influx of entrepreneurs, the economy is unable to grow. Innovation, new products and new wealth are essential to business and to a healthy economy.

Learn more about Careers

Related Questions

Explore