How does an entrepreneur influence the economic growth of the country?

Answer 1

Most new jobs are created by small companies - and in fact, they are created by companies that are small because they are new.

New companies create new products. The owners of the companies play around with the design of these products, and because they are largely hand-crafted products, that's relatively easy to do. Eventually, the design stabilizes, the market matures, and the company stops growing so fast.

At this point, the company usually gets sold to a larger company, which is able to invest large sums of capital to automate production, thus reducing the cost to make the product. They also combine functions such as personnel, purchasing, shipping, etc., to further reduce costs. Thus, new small companies create jobs and large old companies destroy them.

Since WWII, there has been a shift from people working on their own farms or running their own hardware stores to taking a job for the huge corporations. That has been a large factor in our current economic situation. Our laws make it expensive to fire old employees, so large corporations have kept them on until they close a facility or the employee retires. With the recession, a lot of people in their 40s and 50s have lost their jobs, and nobody wants to hire them when younger employees are available for less, especially since the younger employees don't have the health problems that have been caused by working in the factories of yesteryear.

People generally don't start new businesses unless their parents were self-employed, and colleges don't do a very good job of teaching entrepreneural skills. If you can solve that problem, you would be doing this country a huge favor!