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by delivering goods and services into the economy it helps gross domestic product and reduces imports for such product or service also creates more competition among companies by introducing more than one or few sources for the product or service produced
Business services contributes directly and indirectly to aggregate economic growth. Economic developments ,the development of economic wealth of countries or regions for the well being of their inhabitants. progressive changes in the socio-economic structure of a country.
Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.
Business is an economy stimulation tool through fulfillment of specific needs and requirements for the different parties that get engaged in business transactions.
Business is one of the major source for economic growth, trading activity always help buyers and sellers , dealing in commodity, manufacturing activity, buying and selling help money to flow from one hand to another. Job opportunity, self reliance always help economy to grow in size.
The Small Business half of the economy has clawed its way back to a somewhat normal level of economic activity according to the National Federation of Independent Business (NFIB) monthly surveys. The NFIB’s Index of Small Business Optimism has just reached its42 year average, taking years to regain its footing after the official end of the Great Recession in June,2009. The recovery of the small business sector did not follow the usual pattern, an early surge in optimism, hiring and spending, tapering over the expansion toward the average. There was no surge this time, just plodding, sometimes erratic, improvement over6 years.
Large firms have followed a different path, driven by strong growth in exports and expanding overseas business (output produced there but not counted in our GDP, although providing profits for the international firms). Indeed, the valuation of these firms has reached record levels yet the growth in domestic output is shrinking (first quarter real GDP growth is negative). Over the past20 years, the ratio of Fortune500 revenues to GDP have risen over10 percentage points to over70%. Viewing the economy as a large corporation with many divisions, it is clear that investors think that the large firm division is doing very well.
This view is supported by the anemic growth of the economy in the recovery, averaging a little more than2% growth, which was the average of anemic growth in the small business division and strong growth from the large firms. For large firms, prospects are fading because several of our major trading partners are either in recession (Western Europe) or experiencing slower growth. This means that exports are slowing along with sales at foreign subsidiaries that produce and sell output in foreign countries and provide profits to our large firms.
Population growth provides fundamental support for growth in the small business sector. With three million additions each year, the demand for services grows (more haircuts etc.) and this demand is to a large degree met by small businesses. For the first few years of the recovery (12 quarters), the small business sector was shrinking, terminations far exceeded new starts and millions of jobs were destroyed. Few new firms were needed to serve (or house) the expanding population. As the excess capacity in housing and small businesses was worked off and the population grew, economic activity picked up in the small business sector, increasing its contribution to growth.
That said, the outlook for economic growth is not especially encouraging. Our large global firms face many issues, weak growth or recession for many customer countries (that don’t have population growth), weaker export demand, a strong dollar and political instability to name a few. Small business faces an equally challenging future, with the management team in Washington D.C. worried about climate change and income redistribution. Positive action on small business top concerns (health care costs, energy costs, compliance costs, uncertainty about government economic policy and tax code reform) seems unlikely for the next two years. Large firms are not spending their cash and profits domestically, buying shares back from shareholders who aren’t spending more. Consumer sentiment is weak, savings high. In the April NFIB survey of its350,000 member firms, more owners expect business conditions to be worse than today than expect improvement. Only13% think the current period is a good time to expand, half of the rate typically observed in a growing economy. The NFIB Index of Small Business Optimism (based on10 questions) is still below its pre-recession average. So the private sector will prevail over the headwinds it faces (too many from government), but it will continue to be slow going
Economic developments the development of economic wealth of countries or regions for the well being of their inhabitants. progressive changes in the socio-economic structure of a country ,
The most important aspect where a company enable economic development is by reducing unemployment. The more the company employee people, the more making them economically stable. Besides, all companies in the world are paying corporate tax to the government hence boosting economic growth which hence turn out as economic development.
In other scenarios companies participate in doing a certain work which will help all people, such as building of bridges and construction of roads. That is what economic development is all about.
Small businesses do not always stay small. Large corporations, such as Nike and Ben and Jerry’s, started off as small businesses that grew to become major players in the national and international marketplace. Many computer-industry leaders began as “tinkerers,” working on hand-assembled machines out of their garages. Microsoft is a prime example of how a small business idea can change the world. Small businesses that grow into large businesses often remain in the community in which the business was first established. Having a large corporation headquartered in a community can further help provide employment and stimulate the local economy.
Economic growth is important if businesses are to grow and prosper. It relates to growth in the output of the economy as a whole. Growth is measured as the change in the gross domestic product (GDP) of a country over one year. For comparisons over time this figure must be adjusted to allow for inflation and the resulting value is called 'real growth'. Over time real economic growth leads to major improvements in living standards, expanding existing markets and opening new ones. The real economic growth of one country relative to another is an important indicator of business opportunity.
When Business work in a field that is still potential and not fully developed, this will definetely contribute to the economic development
