How exactly does entrepreneurship benefit the economy?

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Entrepreneurs are crucial for our economy. Entrepreneurs not only create new jobs but also provide goods and services that benefit society. The benefits of entrepreneurship come not only through the income of the entrepreneurs themselves but also increasing tax revenue. According to the U.S. Small Business Administration, an entrepreneur is someone who “is the owner of a small business and usually occurs independently rather than as part of an employer-employee relationship but may employ one or more workers.” This essay will discuss entrepreneurship and how it benefits the economy.

Create Jobs

The most obvious benefit of entrepreneurship is the creation of jobs. Entrepreneurship is only possible with an existing workforce and a lack of a job market. If an individual has a business idea for a new product and hires employees to produce it, those employees will have jobs. In fact, according to an article in the Washington Post, nearly 80 percent of all new jobs are created by small businesses. Entrepreneurship is essential for providing employment, as well as contributing to GDP, a measurement of the overall size of the economy.

Introduce new products and services

Another benefit of entrepreneurship is the creation of new products and services. The product or service may be new to the market or provide an improvement on goods or services currently available. When entrepreneurs are allowed to start new businesses without interference from the government, they can create entirely new products and services. Entrepreneurs are essential for bringing new products and services to the market, either by improving on goods currently available or bringing entirely new goods and services to the marketplace.

Raises consumer spending

Entrepreneurs who create new products and services are also responsible for the amount of spending in the economy. When new goods and services are created, consumers can purchase these new goods and services. Consumers, in turn, are responsible for the amount of spending in the economy. This spending is what drives the economy, and is the main source of growth. Consumer spending is one of the main components of GDP.

Increases the tax base

An entrepreneur is not only an individual who creates jobs but is also an individual who pays taxes. Most entrepreneurs are individuals who are self-employed and do not work for a corporation. The government can collect taxes from the profits of entrepreneurship. This is good for the tax base of the government, as well as the economy. An increase in consumer spending, as well as tax revenue from entrepreneurs, helps in raising the tax base of the government, as well as the overall size of the economy.

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