There is a myriad of definitions attributed to a startup. Neil Blumenthal says that a startup is an establishment entering a field in which the problem’s solution appears oblivious and success is not definite. Adora Cheung, CEO of Home Joy says that it is a state of mind, a risk people take to experience outstanding growth.
Of course, there is risk involved in starting a business, that is why a startup can also be defined as an entrepreneur’s process of beginning a business. The entrepreneur has identified a problem and wants to make concrete resolutions for that problem in the form of his business.
Another ground-shaking definition was given by Wil Schroter. To him, it is the enactment of a founder’s dream. He or she views a big picture, inscribes it in the mind, and formulates the idea into a business to make it a reality. This lands them on a stage of uncertainty.
A startup is also a company in its early stages that is not yet successful with a small base of employees. Most times startups are assumed to start from the barest minimum.
All of these only underscore the impacts of startups on the economy. There are lots of benefits that come with encouraging these fledgling companies in so far, the opportunities are laid bare for them to bloom.
Baby companies are usually formed with the intent of solving a problem. It is advisable that when individual wishes to start his own company, he must learn to work to learn and not to earn. This approach should accompany the “dream big” mentality. After this, startup founders also try to understand the markets they are venturing in. They try to make viable scenarios of others by incorporating it into their founding process. They run feasibility checks and put elements in place that will ensure their success.
Although they start small, they can be described as blessings in disguise on a brooding or failing economy. Developed economies create livable atmospheres for startups to thrive. Not only that, the drive and passion of people to create ideas that ruminate their thoughts entice the uprise of startups. Here are the five impacts of startups on the economy.
Startups are responsible for the creation of new jobs which increase the net amount of salary earned. This is an efficient addition to the national GDPs and ensures economic growth in the long-run. It also helps in curbing unemployment. The creation of new jobs by startups push fresh graduates into the market of human resources. They gain experience, understand the nook and crannies within their field, and become productive citizens.
Startups aid the economy with their inventions and innovations. Most times, startups find themselves in unpredictable situations that proffer no solutions. Their services or ideas may render help in the key proponents of the economy. Creative ideas can help boost the economic process. It will also stir up new competitors in the process.
Startups help in increasing the level of productivity a country gives off. With the uprise of new startups in different fields and creative new ideas, others with similar dreams will follow suit. This means increased levels of employment, creative ideas, innovations, and a wholesome economy.
Productivity helps in making a positive impact in an economy with new mind-set and career goals that fill the market forces. This will also boost the production of goods and services meant for consumers.
The advent of other competitions
A major advantage of startups is that they inadvertently coax people to form their startups and compete against other companies. As more competitions rise, the thoughts of a monopoly will be put off. Hence firms can make more profit from consumer satisfaction. Consumers, too do not have to succumb to the blatant prices of the monopolist.
Startups give room for new markets. By introducing their ideas into incertitude, they create a ground for never before seen markets. For example, the digital cab services (e.g., Uber, Taxify, Bolt) that rummage the earth, likewise the companies that dominate the e-commerce sector. As new markets are opened the world becomes more global as economies advance. This creates more room for variety, all over. New markets also mean more employees, more marketable skills, and futuristic skills for development.
Startups are an essential aspect of growth and development in any economy. However, they are prone to fail. Not all startups are successful. Further, they do not remain startups for long. The process of becoming a fully-fledged company starts with a step. The existence of startups is that step.
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