Introduction

Small businesses and start-ups play major role in social economy. This article presents importance of small business for social economy. The business innovates new thing and ideas for people and stay connected with people directly.

Analysis of the importance of small businesses and start-ups for social economy

Small business brings Innovation

The most important role that small business and new start-ups play is innovation and this potentially contribute to develop the social economy of a country by enhancing the quality of lives (Ahlstrom, 2010). Small business always try to innovate new thing for people and innovates new thing by experimenting on old things. For example, Jeff Bezos was a young graduate and got the idea to sell books rough internet. The entrepreneur invented a new e-commerce industry which served people the online service of buying book. Small business is connected with creativity and people get new things.

You may also be interested in:
Differences among entrepreneurial ventures
Impact of small businesses on the UK economy
Traits and skills of successful entrepreneurs
How background foster or hinder entrepreneurship

Small business and business start-ups create new Job Opportunity

Another important role that small businesses and business start-ups play is that they create new job opportunity. Small business makes the entrepreneurs self-dependent and creates job opportunity for people. The business can make job opportunity for many people. In 2014, the small business employed 24.3 million people in UK. Small business plays an important role by making people employed it is a social benefit.

Above figure shows that small businesses generate around 52% of the employment opportunities in the UK in 2021.

Make Scopes for Women and Minorities

The importance of small businesses for social economy is also reflected in creating scope for women and minorities. Through small business, women and minorities get the chance to enter the economic mainstream. Women and minorities are large part of a country’s population. They do not get the chance to work in every sector but they can be entrepreneur through small business. Small business creates the scope for women and minority to make their own identity which is very important for social improvement.

Generates Tax and revenue for government

When local residents shop from small businesses the tax will remain in their social economy and it will be helpful for their community. This potentially reflects the importance of small business for the social economy. With this process the profit remains in their own community and it helps to improve their community economically. For example, small business and business start-ups will provide tax revenue for the governments who will then be able to make the best use of the tax revenue to enhance quality of lives. This is how small businesses can grow the social economy of a country.

Small business helps big business

Large companies depend on small company in many sectors. For example, UK automakers depend on 1700 suppliers because the suppliers provide large companies the necessary parts they need. Small business also provides outsource services for big companies. For more example, Big businesses give the responsibility of managing their website to small company. And small business also helps big business by being their sales agent.