The role of business in social and economic development cannot be overstated. Business plays a vital role in the economic development and wealth of a country. Success in business translates to the economic well-being of a company and its residents through job creation and offering improved quality of life for the country’s citizens. Here, we delve into several aspects that relate to the importance of business in today’s economic environment and society.
Economic Development and Business
Small and large businesses drive economic stability and growth by providing valuable services, products and tax dollars that directly contribute to the health of the community. They also provide jobs, strengthening the economic health of each community where a business is based. Even if a business is headquartered elsewhere, employing people at each local business contributes to the success of that region, as with the wages they earn, people buy property, work, shop and otherwise invest in where they live.
Taxes are used, among other things, to maintain the infrastructure of a city, state or country – roads, bridges, tunnels, public transportation, libraries and other public buildings and services, including police officers and firefighters, all benefit from tax money collected from individuals and businesses. These services are essential to the good health and positive qualities of local and national citizens. In a capitalist society like that of the United States, business growth and increased sales means collecting more taxes, which can directly translate to better maintenance and offerings of local infrastructure and services that benefit the community.
World Economy and Business
The success of business as a whole directly affects the world’s economy. At its core, businesses are designed to serve a particular need that people have, and to provide trusted goods and services related to that need. When consumer confidence or trust dips in business, it isn’t just sales that are negatively affected. This mistrust has a ripple effect and can result in a decline in a country’s general economy, weakening the strength of its currency and buying power.
As businesses focus more and more on providing value to shareholders instead of directly to consumers, their interests and tactics may not align with the best interests of the consumer. A “profit at any cost” model can have extremely negative implications down the road if corners are cut and poor decisions are made in the name of solely working to increase shareholder profit or are based purely on greed. No matter how efficiently you make a product or how special the service is that you deliver, if you lose consumer confidence as a result of your business decisions, consumers won’t support you by purchasing your goods and services, and then nobody benefits.
Why Business Matters
Business is directly related to the economic health and well-being of the citizens of the city, region, state or country in which those businesses are active. Profitable businesses drive economic health, which translates to a better quality of life for the citizens.
The economic health of a region and its ability to sustain businesses – particularly small businesses – can offer tremendous opportunities for diversity in business ownership that might not otherwise exist. Communities and states that foster new business development and assist with business creation derive benefits for their citizens and residents through the products and services businesses provide, and allow for opportunities for women and/or minorities to start and run businesses.
Almost 99 percent of women-owned businesses are considered small businesses, according to the Small Business Administration. When you consider that women are half the population and close to 50 percent of workers, this shows how important small businesses can be for women and those who work in women-owned businesses. Further, almost 60 percent of businesses owned by African-Americans are owned by women.
The number of businesses is also important – the more, the better. Economic diversification means less reliance upon one particular business or industry, and allows the region to better withstand the normal ups and downs associated with the cycle of doing business.
Business and Chambers of Commerce
A chamber of commerce is essentially a local networking organization designed to foster business and professional memberships in the community. Being a business that’s a member of a chamber of commerce lends an air of legitimacy to your business and can offer growth opportunities through advertising and sponsorship opportunities with the chamber. Membership fees can be steep for small businesses, but you have to evaluate what the benefits might be that would make the fees worthwhile, such as increased sales, networking opportunities and better name recognition for your business.
Corporate Responsibility and Economic Health
As businesses and corporations grow, their role in corporate responsibility and social development can become as important as that of their contributions to economic health. It’s thought that a business shouldn’t just serve as an economic machine, but also have stewardship in issues that affect society as a whole, such as environmental concerns, human and worker rights, support of local and national charities, schools, and a variety of non-profit organizations that offer benefits to the community and make the quality of life higher for its members.
As a business grows and develops, these matters should be evaluated as the company may eventually be viewed not just as a way to make money for employees, owners and the community, but as an important part of the community or country, whose profits in part serve the greater good through environmentally friendly business practices or supporting groups that help strengthen communities like charities.
Role of Business in Development
Business is vital to a country’s economy. Success of businesses can drive the success of an entire country, including through contributions to the gross domestic product, or GDP, of a nation, which affects their world standing. If a country supports businesses with goods and services that are in demand, everyone in the country benefits. From job creation that results in money being put back into the community to taxes that help the government smoothly run and provide maintenance and improvements to the country’s infrastructure, or in other ways that are helpful for its citizens, there are dozens of ways business success translates to economic development.
In addition to providing products and services that citizens and residents want, economic health can allow for exporting goods and services to others who want those items, contribute to offering avenues for education and training for citizens, create healthy business competition and provide additional methods of strengthening economic development for the country as a whole.
The role of business in relation to the economy is a pivotal one. Small businesses boost economic revenue on a smaller scale, but one that’s of vital importance, directly and positively affecting the health, quality of life and purchasing power of residents in the local community.
But small businesses don’t always stay small. Many nationally known brands today got their start as very small businesses run out of someone’s home or garage. Startups can become multinational companies that can have a huge and positive impact on the global economy, benefiting all of the company’s employees and the communities in which those businesses thrive. Apple, Whole Foods, Amazon and Starbucks were all ideas started on a small scale that have had incredible, explosive positive impacts not just on the U.S. economy, but on a global scale.