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The Importance of Entrepreneurship

An entrepreneur is someone who does things differently. Armed with passion and fresh ideas, entrepreneurs take risks and create new businesses, products, and services. Entrepreneurs can be found in every field, but share many characteristics like creativity, strong communication skills, an independent spirit, and a love of problem-solving. Why is entrepreneurship important in our world?

Entrepreneurship encourages innovation and creativity

A big part of entrepreneurship is rewriting the rules. In many businesses, innovation stagnates because people don’t question why things are being done in a certain way. They don’t wonder whether things can be done differently. Entrepreneurs ask these questions and hunt out creative answers. They aren’t afraid to push against the majority and challenge the status quo. This is the only way to break free from the past and move into the future. If businesses refuse to embrace an entrepreneurial spirit, it could mean their downfall.

Consider the cautionary tale of Blockbuster Video. In the 1990s at its peak, Blockbuster was a $3 billion company with over 9,000 stores across the United States. In 1999, they passed on an opportunity to buy a two-year-old company called Netflix. Instead, Blockbuster decided to build a video-on-demand service with Enron. Enron quickly saw that their partner was more interested in video stores than a new service. In 2001, Blockbuster gave up on streaming and, as a result, their future. By refusing to innovate, Blockbuster signed its own death certificate.

Entrepreneurship increases productivity

Productivity is essential to success and long-term impact. What is productivity exactly? It’s the measurement of how effective a person, business, or system is within a period of time. People and businesses are always looking for ways to be more productive and use time as effectively as possible. Simply “working harder” is usually not good enough. One has to work smarter. That means embracing entrepreneurship and thinking outside the box.

What does this reimagining of work and productivity look like in action? In 2019, Microsoft Japan conducted a 4-day work week experiment. One might assume that productivity would fall when people have less time to work, but the results showed productivity increased by 40%. This is a good example of how challenging the old way of doing things can be beneficial.

Entrepreneurship is good for the economy

More products and services mean more things for people to spend money on. Spending stimulates the economy. However, entrepreneurship doesn’t only create new products and services. Entrepreneurship also creates new jobs. New businesses need employees. Depending on the type of business and products/services they’re offering, many jobs are more specialized, which means employees are paid more. Access to training and education must keep on pace with available jobs, so there are enough people to fill these more high-skilled jobs. Higher wages generate wealth and stimulate the economy. A nation’s economy and overall productivity get a boost. This makes them more competitive on the international stage.

Technological entrepreneurship in particular is great for the economy. New technologies allow for more streamlined processes and increase productivity in all sectors they’re applied to. Historically, innovation within a region has led to stronger economies.

Entrepreneurship fuels social change

Beyond encouraging innovation and growing the economy, entrepreneurship can improve peoples’ quality of life and lead to positive social change. Innovations in sectors like healthcare, agriculture, and education can have a massive impact. While any entrepreneur can make a positive change in society, there are social entrepreneurs dedicated to it. The term “social entrepreneurship” became popular in the 2000s and is now more common. Social entrepreneurs usually set up non-profit organizations or they balance their desire for profit with social impact goals. They measure their success differently than classic entrepreneurs.

This type of entrepreneurship uses creative thinking and problem-solving to address societal issues like homelessness, poverty, hunger, and more. The internet has played a big role in the spread of social entrepreneurship. It connects people from across the world and facilitates new ways of obtaining funds. Crowdfunding is one example. Social entrepreneurship, especially for young people, is a priority for the United Nations. The 2020 World Youth Report focused on youth social entrepreneurship and how member states can offer supportive environments, training, education, and more.

Why the entrepreneurial spirit is so important

Innovation, creativity, and risk-taking are key parts of entrepreneurship. When individuals and businesses embrace an entrepreneurial spirit, they enjoy increased productivity, better problem-solving, and fresher ideas. Entrepreneurship isn’t easy and comes with many challenges. There’s a high likelihood of failure, which is why many don’t find shaking up the status quo appealing. Along with the risks, however, there’s the potential for high reward.

Entrepreneurship pushes society to find new, better solutions for old problems. It’s good for the economy and creates more products, services, and jobs. It’s also an essential force for social change. Complex, widespread issues like poverty require innovative solutions. When a spirit of creativity and a willingness to take risks mix, society can break down barriers and move into a brighter future.

About Emmaline Soken-Huberty