The more businesses there are on the market, the greater the competition. And intensified competition results in lower prices, greater choice of products, and better quality of goods and services for the customers. Hence, the quality of daily life gets higher. Greater choice of products. With more competition, the variety of products available on the market will also increase because the entrepreneurs who set up new businesses bring ideas for new or improved goods and services. Small businesses often provide specialist goods and services to consumers which larger businesses are less interested in supplying.
This helps to create a greater consumer choice. Cheaper products. Sometimes smaller businesses have much lower costs than larger businesses and can pass this on to the consumer through lower price. In other words, startups create founders that know how to solve problems. Startups are the agents of social mobility. For societies this is an opportunity for those from underprivileged backgrounds to build a better future for themselves.
Ultimately, the more entrepreneurial activity, the more chance of social mobility, which prevents our societies from ossifying. Conclusion: The economy can stop for a second. For that reason, we have been asking governments to support startups both financially as well as through legislation. Broadly, governments can support startups by creating legislative environments that are favourable to innovation and new ideas.
In turn, startups will provide solutions and continue to produce economic and societal growth. The views expressed in this article are those of the author alone and not the World Economic Forum. US consumer prices have risen to their highest rate since , with consumer prices up 6.
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Fostering the growth of entrepreneurial ecosystems Over the past 35 years the level of government interest in entrepreneurship and small business development as potential solutions to flagging economic growth and rising unemployment has increased. What is an entrepreneurial ecosystem? What can government do to stimulate entrepreneurial ecosystems? Allow for natural growth not top-down solutions — Build from existing industries that have formed naturally within the region or country rather than seeking to generate new industries from green field sites.
Ensure all industry sectors are considered not just high-tech — Encourage growth across all industry sectors including low, mid and high-tech firms. License and Republishing. It is in the government's best interest to keep the economy healthy by, among other things, ensuring an encouraging environment for small and large businesses. This being the case, the government has a number of tools at its disposal to encourage business activity throughout the economy or in specific industries.
The Federal Reserve can alter the Federal Funds Target Rate — the figure that directly influences the prime interest rate — to stimulate lending to businesses and consumers. When the prime rate dips, borrowing becomes more profitable. This encourages businesses to expand, and allows consumers to experience temporary increases in discretionary income.
Aside from the age-old argument that lower corporate income taxes encourage business activity, the government has other techniques in its tax toolkit that can stimulate specific industries.
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