A business entity is involved in a commercial activity which could be any goods or services in exchange for some profit. Business can be owned by a private individual(s) or by the state. The level of business can vary from a petty hawker to large scale corporate houses. Business is generally conducted for an individual or a group of individuals.
Economy, on the other hand, is a much wider term and functioning of an entire area or country or even the world depends on it. It includes production-consumption, demand, and supply of various goods and services by a large number of entities which can be private individuals or even the government.
Both of these concepts (business and economy) might seem different from each other however they are like the two different sides of the same coin. Both these concepts are inter-related and inter-dependent and go hand in hand.
The relation between business and economy
Business is as important to the economy as fuel for the vehicle. In case there are good businesses in any particular country, it will provide jobs to a number of people within that country which will improve spending power of the individuals which will in turn increase demand for goods and services. In case there is a demand for goods and services, it will provide business opportunities to individuals. Business organisations are also required to pay taxes which bring direct growth to the economy of the nation.
Impact of exports and imports on economic growth
Imports and exports play a vital role in term of economic growth of the nation. Now people are able to explore options from around the world which provides more options and verities to the customers. Accordingly, now there are huge exports and imports between the countries. Export and import help the country in improving its GDP, currency exchange rate inflation and many other important factors. Exports play a more vital role as compare to imports and hence it is important for any country to increase its exports across the world.
Many of the world troubling problems have been solved by globalization.
How small businesses lead to economic growth?
It is often misunderstood that economic growth only depends on large business houses. It is pertinent to mention that small businesses play a very significant role in every economy. Small businesses provide business opportunities to locals and also provide jobs to a number of people around that area. In every economy majority of business is being done by small business houses as per a survey conducted in US 99.9% of business in the country was conducted by small businesses. Small businesses collectively employ much more people as compared to large scale business.
The presence of small businesses is very high in smaller areas and they bring healthy competition in the market. This all leads to better economic growth for any country.
Role of Natural resources and technology in economic growth
Natural resources and technology are very important for any country. A country rich with natural resources such as oil, natural gas, minerals, and metals ETC will have greater advantages and business opportunities as compared to with scarcity of natural resources.
Similarly, countries with better and advanced technology get an edge over other countries in terms of business and economic growth.
Even if business and economy may sound different to a few people, they are inter-related and highly dependent on each other.
In case there are a large number of successful business enterprises in any country, it will definitely lead to economic growth. Similarly, in the case of countries with good economic growth will result in more business opportunities for individuals.
Business and economy live in harmony with each other and this balance should be maintained at any cost.