Startup business and its Impact on the economy

What is Startup Business

“A startup company, or simply a startup, is an entrepreneurial venture in its early stages of operations typically aimed at resolving a real-life issue with an innovative product or service. These ventures are typically small in nature, new, and funded by either to founding entrepreneur or a group of investors who believe in the founder or company concept.”

In this article, we will discuss the startup business and its impact on the economy.

Impact of Startup business

Startup Business and its impact on the economy. Startups business can be highly beneficial for a community as well as the economy of a country because often these businesses come up with new ideas and innovative products which can be used to resolve some of the problems in society. The Startups business are normally small in size because of the high risks in new ideas and products. Usually, these businesses can be established and be grown in two ways: loan from the bank or any other source and funds from the investors. Investors can be attracted if the business solves any problems in society and have a growth opportunity in the future. Although, if the owner doesn’t want to share the ownership with others he/she can just take a loan from any specific source. Startups business have many benefits and some of the reasons for encouraging business startups are:

  1. Innovations
  2. New jobs and economic growth
  3. Bringing new competitive dynamics into the economic system
  4. Promoting the research innovation system
  5. Bringing the values of proactivity into the society

a) Innovations

Startup businesses are usually the main contributors for the development of an economy and the growth in the productiveness in a knowledge-based community. A Startup corporation can be the most suitable business to test new inventions and to introduce for commercialization. Startups’ business is highly important for the development of new technologies and the community where they operate. Large businesses usually buy the new emerging startups companies to use their business ideas, innovation, technology into their large corporation for their development and for gaining competitive advantages.

b) New jobs and economic growth

Whenever new startups companies come into existence and sustain in the market for a longer period of time then it provides employment to lots of people and also helps in the country’s economic growth. As startups companies are mainly established on the base of ideas and innovations, it shows how good the economy is. If a country wants to provide employment to the people in the long term, then they have to focus and invest in those companies who have the ability to provide lots of jobs in the long term. Startup companies are the most suitable for the form of business to provide employment opportunities in the long term.

c) Bringing new competitive dynamics into the economic system

Startups company can be recognized as the most dynamic organization of the economy in a market as they furnish additional dynamics to the economic system and competitiveness among the major companies. This results in that the economy will stay healthy and developed.

d) Promoting the research-innovation system

High tech startup companies are usually linked with the knowledge institution. This results in promotion of the research and development and innovating approach of knowledge institutions. Students and research are also gets attracted to the Startup businesses to develop their own ideas and then implement it through the Startup business.

e) Bringing the values of proactivity into society

Startup entrepreneurship plays an important role in bringing the changes in the values of society on the basis of their ideas, knowledge, creativeness, etc. As technology has changed over the years, it has helped a person to establish his/her own business more easily and when they have a great idea or innovation then they can start their own business. Startup businesses can highly motivate people and communities to be more active and innovative.

“Sandile is the Founder of the Startup Foundation, a non-profit organization supporting innovative youth entrepreneurship in South Africa. The Foundation develops programs that revolutionize the South African startup ecosystem and help young people become high-impact entrepreneurs through the provision of the best resources.”

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