Entrepreneurs are identified as individuals who use their creative abilities to solve societal problems for economic gain. Most innovations you see today — from smartphones to roads to cars to houses — all started as a spark of an idea in an entrepreneur’s mind, which they chose to pursue and turn into reality. As society evolves, entrepreneurs and entrepreneurship will continue to be at the forefront of this change.
Alex Fortunati of Huntington Beach, California, has 30 plus years of experience as an entrepreneur and CEO. As an entrepreneur himself, he sees his role in society as one of helping society evolve into a better version of itself. Through his various ventures, he has helped create benefits for both his customers and employees that would not exist if he had not pursued the entrepreneurship path. Alex Fortunati shares what he sees as the top four reasons why entrepreneurship is so important to society today and into the future.
Catalyzes Economic Growth
Entrepreneurship is like a seed, explains Alex Fortunati. When planted, it grows into a tree that supports a microcosm of ecosystems within its reach. Within the context of the economy, entrepreneurship is behind the birth of not only new businesses but new industries as well – industries that go on to create jobs and catalyze economic growth. Take the invention of the microchip. Its inventors pursued it as an entrepreneurial venture, but today, the technology powers the multi-trillion-dollar tech industry.
This cascading effect not only creates opportunities for those directly involved in the industry, but spurs the growth of adjacent sectors as well. For example, advances in handheld device computing power have led to an explosion in advanced mobile apps. Such apps generate billions of dollars in economic value that would be impossible without the entrepreneurship that birthed the modern microchip.
Contributes to National Income
Wealth creation is an essential outcome of entrepreneurship, says Alex Fortunati. When wealth is created, it contributes directly to the national income of a country. How does entrepreneurship do this? Take a factory that manufactures widgets. At its maximum output, the factory can employ 100 people. The factory’s maximum output also acts as a glass ceiling for its revenue. If production were to remain constant, the company would stagnate, wages would stagnate or even fall, and the company and country would be worse for it.
Through entrepreneurship; however, the company can create new product lines or better ways of manufacturing. Such efforts would lead to expansion, allowing the company to ramp up production, hire more people, and pay out more salaries. In this way, entrepreneurship acts as a driving factor in the growth of national income. Without entrepreneurship, the economy would cool down, and companies would be forced to start laying off employees.
Spurs Social Change
Social change is how societies adapt to evolving environments. Social change is not easy. Unless driven by factors that cause organic change, it is impossible to attain meaningful social change. Entrepreneurship, as a change factor, does this effectively. When entrepreneurs create solutions that lead society down a better path, people willingly embrace this change and society changes for the better. Perhaps the best example of this is renewable energy and climate change.
Halting and reversing climate change requires radical social change. While it seems that policy formulation is the long and uncertain path to much-needed change, renewable energy entrepreneurial efforts are offering a shortcut to sustainability. Take the EV company, Tesla. Through entrepreneurship, the company is stimulating social change by showing people that they do not need to sacrifice comfort or performance to embrace sustainable technologies.
Cultivates Community Transformation
Communities around the world rely on entrepreneurship to solve their pressing needs, says Alex Fortunati. When entrepreneurship slows down or is non-existent, communities collapse into primitive ways of living. No sector is more evident of this than in the area of water and sanitation. When you compare the developed world and the developing world, the contrast is clear. In the developed world, where entrepreneurship thrives through favorable policies and access to capital, water and sanitation are highly developed and citizens enjoy high levels of service. In developing countries, the opposite is true.
Entrepreneurship is playing a significant role in bridging this gap. Through contextual technologies (such as the no-flush toilet), communities in developing countries can transform for the better. Further, it is through entrepreneurship that non-governmental resources can go towards such transformative entrepreneurship. Organizations like the Bill and Melinda Gates Foundation and the Rotary Foundation rely on entrepreneurship and the resources and technologies it creates to bring change to communities around the world.
Alex Fortunati’s Final Thoughts
Entrepreneurship is a national strategic asset and must be treated as such. Countries that create a favorable environment for entrepreneurs stand to benefit from the advantages outlined above. However, there must be a balance between promoting entrepreneurship and supporting mature industries, says Alex Fortunati.
While entrepreneurship creates new benefits for a country and its people, it is important to remember that mature companies and industries are often the ones that create the resources that fund entrepreneurship in the first place. Entrepreneurship and established, mature companies each serve their purpose in society, allowing for a diverse and strong economy.
